Allis-Chalmers Mfg. Co. v. City of Fort Pierce, Florida

• Decision Date: 24 September 1963
• Docket Number: No. 20345.,20345.
• Citation: 323 F.2d 233
• Parties: ALLIS-CHALMERS MANUFACTURING COMPANY et al., Appellants, v. CITY OF FORT PIERCE, FLORIDA, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

323 F.2d 233 (1963)

ALLIS-CHALMERS MANUFACTURING COMPANY et al., Appellants, v. CITY OF FORT PIERCE, FLORIDA, Appellee.

No. 20345.

United States Court of Appeals Fifth Circuit.

September 24, 1963.

S. Hazard Gillespie, Davis, Polk, Wardwell, Sunderland & Kiendl, New York City, Hervey Yancey, Smathers & Thompson, Miami, Fla., for appellant Allis-Chalmers Mfg. Co.

David T. Searls, Vinson, Elkins, Weems & Searls, Houston, Tex., for appellant General Electric Company.

Harry B. Kelleher, Lemle & Kelleher, New Orleans, La., C. Robert Burns, Burns, Middleton, Rogers & Farrel, Palm Beach, Fla., Claude Pepper, Miami Beach, Fla., for appellant Westinghouse Electric Corp.

Merrell E. Clark, Jr., William C. Chanler, New York City, Errol S. Willes, Fort Pierce, Fla., Harold E. Kohn, Aaron M. Fine, Dilworth, Paxson, Kalish, Kohn & Dilks, Philadelphia, Pa., Winthrop, Stimson, Putnam & Roberts, New York City, for appellee; David Berger, Philadelphia, Pa., of counsel.

Before RIVES, CAMERON and HAYS,^* Circuit Judges.

HAYS, Circuit Judge.

The order here appealed from was entered in the United States District Court for the Southern District of Florida by the Honorable George H. Boldt, United States District Judge for the Western District of Washington, sitting in the Southern District of Florida as a Special Master. It was approved and confirmed in all respects by the Honorable David W. Dyer, Chief Judge of the Southern District of Florida.

The order directs the disclosure of portions of the testimony of Joseph W. McMullen before a federal grand jury.

The order contained the statement under 28 U.S.C. § 1292(b) to the effect that a controlling question of law is involved as to which there is substantial ground for difference of opinion and that an immediate appeal might materially advance the ultimate termination of the litigation. This Court, by order filed February 18, 1963, granted leave to appeal from the interlocutory order of Judge Boldt and Chief Judge Dyer and the appeal was thereafter duly filed.

We now affirm the order.

The proceeding to which the order before us is incident is one of about 1800 such proceedings which have been brought in 33 federal district courts throughout the country. The complaints in these proceedings seek treble damages under Section 4 of the Clayton Act, 15 U.S.C. § 15, arising from defendants' activities in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. The activities alleged were the subject of investigation by federal grand juries sitting in the Eastern District of Pennsylvania in 1959, 1960 and 1961, as a result of which indictments were returned charging certain corporations and individuals, among whom were the defendants in the present action, with violations of the antitrust laws, including price fixing, bid rigging and market allocation in connection with the sale of various items of heavy electrical equipment.

With a view to devising an orderly system for the handling of these cases, the Chief Justice of the United States appointed a committee of federal judges, under the chairmanship of Chief Judge Albert Murrah of the Court of Appeals for the Tenth Circuit. This committee has worked out a plan under which pretrial orders have been entered in each of the districts in which proceedings are pending providing for the establishment of what is called a National Deposition Program. The central feature of the National Deposition Program permits taking a series of depositions each of which is to be considered as having been taken simultaneously in all the districts in which cases are pending.

It was in the course of taking the deposition of Joseph W. McMullen as a part of the National Deposition Program that the plaintiff requested access to the earlier testimony of Mr. McMullen before the federal grand juries.

In the course of taking depositions under the Program the issue of whether the plaintiff has a right to disclosure of grand jury testimony has arisen in a number of instances. On the occasion of the taking of the deposition of witness Allen, Chief Judge Clary of the United States District Court for the Eastern District of Pennsylvania, where the grand jury testimony is physically located, denied an application for disclosure of the grand jury testimony of the witness. At the same time Judge Clary held, after an extensive examination of the authorities:

"The Grand Jury transcript of any witness deposed in this program, either in this district or in any other district of the United States in which these cases are pending, should be made available to the deposition Judge for use in his district."

Judge Clary continued:

"There may be and probably will be many instances during these national depositions when disclosure may be advisable. Were it not for the availability of Allen\'s summary of his Grand Jury testimony, this may have been just that sort of instance. The refusal to open Allen\'s testimony cannot rule out production where in camera examination by a deposition Judge uncovers material discrepancy or significant facts which the witness concealed, or failed to remember, at his deposition. Such disclosure as is necessary to uncover full and complete facts must be allowed. If, at the completion of any deposition taken in the national program, a motion is made for the production of that witness\' Grand Jury testimony, and if the deposition Judge requests it from this Court for examination in camera, the testimony will be immediately made available to him. The deposition Judge may then contrast the Grand Jury testimony with the deposition and determine, in his own discretion, whether in the interest of justice there is compelling need for disclosure."

City of Philadelphia v. Westinghouse Elec. Corp., 210 F.Supp. 486 (E.D.Pa. 1962).¹

In reaching his decision Judge Clary sought from the Department of Justice a statement of its position with respect to the court's ordering the disclosure of grand jury testimony. The Department made the following statement:

"`1. That such power exists in this Court.

"`2. That such power should be exercised only if and when the Court makes the same kind of determination as to the need for such disclosure that a trial court would usually make.

"`3. That such a determination requires an in camera examination of the transcript by this Court for the purpose of deciding whether or not the rule of justice will be better served by such disclosure than by non-disclosure, that is, whether the public interest in maintaining secrecy of the Grand Jury process is outweighed by a particularized showing that disclosure is needed to achieve a just result in this litigation.

"`4. That where such a determination is made only so much of the transcript shall be disclosed as is needed to achieve this result.

"`5. That before any particular transcript is turned over, the Justice Department be given a reasonable opportunity to express its view as to the propriety of the contemplated turnover of the testimony in question.\'"

In three cases decided before the order of Judge Clary was entered, access to the same grand jury records (In re Grand Jury Proceedings, 29 F.R.D. 151 (E.D. Pa.1961), aff'd 309 F.2d 440 (3d Cir., 1962); United States v. General Elec. Co., 209 F.Supp. 197 (E.D.Pa.1962)), and to the grand jury subpoenas (Application of State of California, 195 F.Supp. 37 (E.D.Pa.1961)) was denied. However in these cases, which were not connected with the National Deposition Program, plaintiffs sought access to grand jury records for general discovery purposes rather than for the limited purposes which were held by Judge Clary to be proper. The cases were distinguished by Judge Clary on this ground (210 F.Supp. at pp. 490-491), and they are likewise clearly distinguishable from the case with which we are presently dealing.

Since Judge Clary's order, disclosure has been directed in the case of six witnesses, three by Judge Boldt and three by Judge Feinberg of the Southern District of New York. Judge Boldt has denied an application for disclosure of the grand jury testimony of one witness.

Applications for interlocutory review have been denied in four cases by the Courts of Appeals in the Second, Third and Seventh Circuits (Atlantic City Elec. Co. v. A. B. Chance Co., 313 F.2d 431 (2d Cir., 1963); City of Philadelphia v. Westinghouse Elec. Corp., No. 14296 (3d Cir., 1963); Nairn v. Clary, 312 F.2d 748 (3d Cir., 1963); Commonwealth Edison Co. v. Allis-Chalmers Mfg. Co., No. 14027 (7th Cir., 1963)), and the grand jury records have been made available. In the case of the other three witnesses whose grand jury testimony has been ordered disclosed we are informed in appellee's brief that the defendants have stated that they do not plan to appeal.

Judge Clary's order in the case of the witness Allen contained provision for the deposition judge's securing the grand jury testimony of a witness in advance of the taking of his deposition (210 F. Supp. p. 491). In accordance with this provision, Judge Boldt in the present proceeding, before the taking of McMullen's deposition had begun, requested and received the transcript of McMullen's grand jury testimony. As the taking of the deposition proceeded, Judge Boldt followed the grand jury testimony. On the fourth day of the deposition proceeding plaintiffs moved for disclosure of Mr. McMullen's testimony. Judge Boldt granted this motion. After the conclusion of the deposition he confirmed his prior order for disclosure. Judge Boldt's order for disclosure was "approved and confirmed in all respects" by Chief Judge David W. Dyer of the United States District Court for the Southern District of Florida.

J. W. McMullen, the deponent, disclosure of whose testimony was ordered in the present proceeding, was, at the time he testified before the grand jury, a Vice-President of appellant Allis-Chalmers and General Manager of its Power Equipment Division. In this position McMullen was charged with general supervision...