Corrugated Container Antitrust Litigation, In re

• Decision Date: 17 July 1981
• Docket Number: No. 81-1960,81-1960
• Citation: 655 F.2d 748
• Parties: 1981-2 Trade Cases 64,196, 9 Fed. R. Evid. Serv. 133 In re CORRUGATED CONTAINER ANTITRUST LITIGATION. Appeal of John CONBOY, Deponent.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 748

655 F.2d 748

1981-2 Trade Cases 64,196, 9 Fed. R. Evid. Serv. 133

In re CORRUGATED CONTAINER ANTITRUST LITIGATION Appeal of John CONBOY, Deponent.

No. 81-1960.

United States Court of Appeals Seventh Circuit.

Argued July 15, 1981.

Decided July 17, 1981.

Kevin M. Flynn, Coffield, Ungareiti, Harris & Slavin, Chicago, Ill., for appellant.

Francis J. McConnell, McConnell & Campbell, Chicago, Ill., for appellee.

Before CUMMINGS, Chief Judge, SWYGERT, Senior Circuit Judge, and SPRECHER, Circuit Judge.

SWYGERT, Senior Circuit Judge.

This is an appeal from an order holding a non-party deponent in civil contempt for asserting the Fifth Amendment in response to questions read verbatim from or closely tracking transcripts of the deponent's previously immunized testimony. The district court ordered the deponent to answer the questions apparently on the ground that he would not be subject to future criminal prosecution based on this testimony. For the reasons stated herein, we affirm the order of the district court.

I

Appellant John A. Conboy is a former employee of Weyerhaeuser Company, one of the defendants in this civil antitrust action instituted by plaintiffs, purchasers of corrugated containers who elected to opt out of the class action brought by other purchasers. In January, 1978, Conboy received a letter from the Department of Justice asking him to appear for an interview in connection with a criminal investigation of alleged price fixing in the corrugated container industry. The letter stated that:

the information which you reveal in the course of the interview and the transcript derived therefrom, along with the personal documents which you deliver to us, will be given the same treatment and protections afforded statements made before a grand jury pursuant to a court order compelling testimony and granting immunity.

On January 10, 1978, Conboy submitted to the interview, in which he answered questions concerning his participation in and knowledge of the alleged price fixing.

By court order on January 16, 1978, Conboy was granted use immunity for his testimony before the grand jury pursuant to 18 U.S.C. § 6001 et seq. Conboy then testified before the grand jury, restating the information he had provided in the interview and expanding on his knowledge of alleged communications and agreements regarding prices. Several defendants were indicted as a result of the grand jury investigation.

Following the criminal trial, numerous civil antitrust actions were filed in various district courts. These lawsuits were consolidated by the Judicial Panel on Multi-District Litigation and assigned to Chief Judge John V. Singleton, Jr. of the Southern District of Texas. ¹ The class action plaintiffs have either tried or settled their claims against these defendants, but the cases of eighteen opt-out plaintiffs are still pending.

Pursuant to a subpoena issued by the United States District Court for the Northern District of Illinois, Conboy appeared with counsel for a deposition on May 20, 1981. Counsel for the opt-out plaintiffs asked Conboy questions either taken verbatim from or closely tracking the transcripts of his grand jury testimony and Justice Department interview. Conboy, on advice of counsel, asserted his Fifth Amendment privilege in response to the questions.

Counsel for plaintiffs then telephoned Judge Singleton and moved him to compel Conboy to answer the questions. After hearing arguments of counsel for both sides and questioning Conboy, the judge, expressly invoking his authority to exercise the powers of the District Court for the Northern District of Illinois pursuant to 28 U.S.C. § 1407(b), ordered Conboy to answer the questions. When Conboy continued to assert his Fifth Amendment privilege, the judge held him in contempt of court but stayed the operation of the order pending this appeal. ²

II

The Fifth Amendment provides that "(n)o person ... shall be compelled in any criminal case to be a witness against himself ...." This privilege "can be asserted in any proceeding, civil or criminal, administrative or judicial, investigatory or adjudicatory." Kastigar v. United States, 406 U.S. 441, 444, 92 S.Ct. 1653, 1656, 32 L.Ed.2d 212 (1972). The Fifth Amendment privilege may be invoked, however, only when " 'the claimant is confronted by substantial and "real," and not merely trifling or imaginary, hazards of incrimination.' " United States v. Apfelbaum, 445 U.S. 115, 128, 100 S.Ct. 948, 956, 63 L.Ed.2d 250 (1980) (quoting Marchetti v. United States, 390 U.S. 39, 53, 88 S.Ct. 697, 705, 19 L.Ed.2d 889 (1968)). The privilege may be supplanted and a witness ordered to testify, by a grant of immunity that is co-extensive with the privilege because "the grant of immunity has removed the dangers against which the privilege protects." Kastigar, supra, 406 U.S. at 449, 92 S.Ct. at 1658.

In the case at bar, Conboy was granted use immunity pursuant to 18 U.S.C. § 6002 ³ for his testimony before the grand jury. The terms of the immunity statute prohibit the use of the immunized testimony or any information "directly or indirectly derived from" it in any criminal case except a perjury prosecution. Id. See also Kastigar v. United States, supra, 406 U.S. at 449, 92 S.Ct. at 1658. Because the questions asked in this deposition were taken verbatim from or closely tracked the transcript of Conboy's grand jury testimony, we believe that his answers at the deposition would be "derived from" the prior immunized and therefore unavailable for use in any subsequent criminal prosecution.

Two other circuits that considered this question have reached the same conclusion. In In re Corrugated Container Antitrust Litigation, Appeal of Fleischacker, 644 F.2d 70 (2d Cir. 1980), the deponent, like Conboy, was a former employee of one of the defendants in this case. His earlier testimony before the grand jury was immunized pursuant to 18 U.S.C. § 6002, and the examining counsel confined his questions to those taken verbatim from or closely following the transcript of that testimony. When the deponent refused to answer the questions in spite of a court order compelling him to do so, Judge Singleton held him in contempt.

The Second Circuit, in affirming the contempt order, held that:

where a transcript of a witness' immunized testimony constitutes the source of questions posed to the same witness in a civil proceeding, responsive answers to such questions are necessarily 'derived from' the immunized testimony, and thus unavailable for subsequent prosecutorial use. Since answers to questions derived from immunized testimony cannot be used against the witness in any criminal proceeding, it follows that, in such cases, the Fifth Amendment privilege against self-incrimination cannot be properly invoked. Therefore, once a court determines that immunized testimony has provided the source of the questions posed, the court may compel the witness to respond without infringing the Fifth Amendment.

Fleischacker, supra, 644 F.2d at 77.

Appeal of Starkey, 600 F.2d 1043 (8th Cir. 1979) concerned an alleged price-fixing conspiracy in the dairy industry. The deponent appealed from an order holding him in contempt for asserting his Fifth Amendment privilege at a civil deposition. As in the case at bar, the deponent was asked questions taken from the transcript of his previously immunized testimony before a grand jury. The Eighth Circuit held that as long as the questions were restricted to "the same time, geographical and substantive framework as the grand jury testimony," then he could not properly invoke the Fifth Amendment. Id. at 1048. The court stated that the deponent "clearly has immunity from criminal prosecution for the (civil) deposition testimony because such testimony would be tainted by the federal grand jury testimony for which (he) received 'use' immunity pursuant to 18 U.S.C. § 6001 et seq." Id. at 1046. Accord, Little Rock School District v. Borden, Inc., 632 F.2d 700 (8th Cir. 1980) ("the immunization of their testimony before the ... grand jury protects them from any subsequent prosecution, state or federal, in which direct or indirect use of this testimony is made").

Our holding today is consistent with our opinions in Patrick v. United States, 524 F.2d 1109 (7th Cir. 1975) and In re Folding Carton Antitrust Litigation, Appeal of Brown, 609 F.2d 867 (7th Cir. 1979). In Patrick, the taxpayer challenged a jeopardy assessment that was based on information given by the taxpayer in his immunized testimony before a grand jury. He argued that forcing him to resort to a refund suit to challenge the assessment puts an impermissible burden on his privilege against self-incrimination because in a refund suit he would have the burden of proof and would necessarily have to present incriminating evidence. The court rejected this argument on the ground that "such later testimony would be elicited only because the government could use the grand jury testimony as a basis for the assessment." 524 F.2d at 1120. Therefore, the testimony in the later proceeding could not be used against the taxpayer in any criminal action because it would be "information ... indirectly derived from" immunized testimony. Id.

In Brown, supra, we held that "(w)hen a witness can demonstrate any possibility of prosecution which is more than fanciful," then he has the right to invoke his Fifth Amendment privilege. ⁴ 609 F.2d at 871. We further stated:

To the extent that an assessment of the probability of prosecution is significant in the trial court's evaluation of an asserted privilege, it is more properly accomplished through examination of the more traditional tests, viz, statute of limitations, immunity, double jeopardy, short of the existence of one of these indicia of an absolute bar to subsequent prosecution, a judge's prediction as to the likelihood of a prosecutor filing an indictment is not dispositive in ascertaining the permissible scope of...