Corrugated Container Antitrust Litigation, In re

• Decision Date: 04 April 1985
• Docket Number: 83-2486,Nos. 83-2281,s. 83-2281
• Citation: 756 F.2d 411
• Parties: 1985-1 Trade Cases 66,525, 17 Fed. R. Evid. Serv. 1049 In re CORRUGATED CONTAINER ANTITRUST LITIGATION. ANCHOR HOCKING, et al. and Dean Foods Company, et al., Plaintiffs-Appellants Cross Appellees, v. ALTON BOX BOARD COMPANY, et al., Defendants, Container Corporation of America, et al., Defendants-Appellees Cross Appellants. ANCHOR HOCKING, et al., Plaintiffs-Appellees, v. CONTAINER CORPORATION OF AMERICA, et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 411

756 F.2d 411

1985-1 Trade Cases 66,525, 17 Fed. R. Evid. Serv. 1049

In re CORRUGATED CONTAINER ANTITRUST LITIGATION.

ANCHOR HOCKING, et al. and Dean Foods Company, et al., Plaintiffs-Appellants Cross Appellees, v. ALTON BOX BOARD COMPANY, et al., Defendants,

Container Corporation of America, et al.,

Defendants-Appellees Cross Appellants.

ANCHOR HOCKING, et al., Plaintiffs-Appellees, v. CONTAINER CORPORATION OF AMERICA, et al., Defendants-Appellants.

Nos. 83-2281, 83-2486.

United States Court of Appeals, Fifth Circuit.

April 4, 1985.

Freeman, Rothe, Freeman & Salzman, Raymond J. Mengler, Glynna W. Freeman, Jerrold E. Salzman, Chicago, Ill., for Anchor Hocking in Nos. 83-2281, 83-2486 and Armour & Co., Kraft Inc., & Wilson Foods Corp. in No. 83-2281.

McConnell, Ruberry & Jansen, Francis J. McConnell, Edward F. Ruberry, Chicago, Ill., for Dean Foods Co., Green Giant, Pillsbury, Gypsum Co., et al.

Robert J. Malinak, Richard N. Carrell, Fletcher Etheridge, Stephen D. Susman, William E. Wright, Houston, Tex., for Stone Container.

John D. Roady, Houston, Tex., for Container Corp.

Donovan, Leisure, Newton & Irvine, Eric J. Lobenfeld, Clark E. Walter, Sanford M. Litvack, New York City, for Container Corp. of America.

Richard M. Clinton, Arthur C. Claflin, Seattle, Wash., for Longview Fibre Co.

Thomas P. Hanrahan, Los Angeles, Cal., Norman J. Wiener, Portland, Or., for Williamette Industries, Corco & Western Kraft.

Mary Jo Eyster, H. Richard Wachtel, William G. Primps, New York City, Mayo J. Thompson, Houston, Tex., for St. Regis Paper Co.

Appeals from the United States District Court for the Southern District of Texas.

Before RUBIN, POLITZ and GARWOOD, Circuit Judges.

POLITZ, Circuit Judge:

This appeal is part of the continuing sage of the corrugated container antitrust litigation. In the cases now before us the plaintiffs appeal a jury verdict absolving defendants from liability for damages for antitrust violations. Plaintiffs contend that they were entitled to a judgment non obstante veredicto or new trial and that they are entitled to injunctive relief against future violations. The defendants claim that the trial judge erred in denying their motion for costs. In addition, defendants Longview Fibre Company and Williamette Industries contend that the trial judge erred in failing to grant summary judgment or a directed verdict declaring that they were not part of the conspiracy which lay at the heart of the antitrust claims. We affirm.

Factual Backdrop

The scenario leading to the instant litigation begins in 1975 with a grand jury investigation into potential antitrust violations in the corrugated container industry. During the course of this investigation George L. Connor, a former employee of Hoerner-Waldorf Corporation, an alleged coconspirator of the defendants, was approached by government investigators. Pursuant to a grant of use immunity, Connor agreed to be interviewed by government attorneys on November 14, 1977. Transcripts of the interview, reviewed and corrected by Connor, were presented to the grand jury.

Eventually the investigation spawned a plethora of private lawsuits which were consolidated into a class action. Plaintiffs were purchasers of corrugated containers who elected to opt out of the class action and pursue their own causes of action against the manufacturers. During discovery, the district court ordered that parts of the immunized interviews and grand jury transcripts of certain witnesses, including portions of Connor's interview, be made available to lawyers for the class and the opt-out plaintiffs. ¹ Using the portion of the interview transcript released, plaintiffs deposed Connor on June 26, 1981. Plaintiffs offered testimony from that deposition in their case-in-chief.

Following plaintiffs' offer of Connor's deposition testimony, the trial court released additional grand jury material, including more of Connor's interview. Plaintiffs promptly requested and were granted leave to reopen Connor's deposition. At the reopened deposition Connor invoked the fifth amendment in answer to every question posed. Plaintiffs sought to compel Connor's response but the trial judge declined to so order in light of the Supreme Court's decision in Pillsbury Co. v. Conboy, 459 U.S. 248, 103 S.Ct. 608, 74 L.Ed.2d 430 (1983). When the plaintiffs attempted to introduce the interview, or the reopened deposition quoting from the interview, as substantive evidence, or to use it for impeachment, the trial court excluded the evidence, citing Pillsbury Co. v. Conboy.

In response to special interrogatories the jury found in plaintiffs' favor that a conspiracy to fix prices existed. But the jury found that the conduct did not "proximately cause any plaintiff to pay higher prices for corrugated containers and/or sheets than it would have otherwise paid." Plaintiffs unsuccessfully sought judgment n.o.v. or a new trial. On appeal plaintiffs maintain as reversible error justifying a new trial: (1) the exclusion of Connor's interview or the deposition referring to the interview; (2) the admission of defendants' lack of profit testimony; and (3) error in the jury charge relative to liability, impact of the conspiracy, and damages. In addition, plaintiffs contend that the jury verdict finding no impact was against the great weight of the evidence and that they are entitled to injunctive relief.

Analysis

1. Connor's Interview

Plaintiffs maintain that the transcript of Connor's interview of November 14, 1977 should have been admitted as substantive evidence under either Fed.R.Evid. 803(5) or Fed.R.Evid. 804(b)(5). We are not persuaded that on the record before us either evidentiary rule provides the basis for the claimed admission.

Fed.R.Evid. 803(5) provides for the admission into evidence of

[a] memorandum or record concerning a matter about which a witness once had knowledge but now has insufficient recollection to enable him to testify fully and accurately, shown to have been made or adopted by the witness when the matter was fresh in his memory and to reflect that knowledge correctly.

The record contains no support for the proposition that Connor was unable to recall the events in question or that the interview correctly reflected that which was fresh in his memory. As we observed in United States v. Judon, 567 F.2d 1289, 1294 (5th Cir.1978), the proper predicate for the admission of a written record under Rule 803(5) requires a "showing that the witness had insufficient recollection to enable him to testify fully and accurately at trial" as well as "specific testimony that the recording reflected the witness' knowledge correctly when the matter was fresh in his memory." The transcript of the government's interview of Connor was not admissible under Rule 803(5).

Fed.R.Evid. 804(b)(5) allows the admission of a statement made by an unavailable witness as an exception to the hearsay rule under certain circumstances. The rule would admit

[a] statement not specifically covered by any of the foregoing exceptions but having equivalent circumstantial guarantees of trustworthiness, if the court determines that (A) the statement is offered as evidence of a material fact; (B) the statement is more probative on the point for which it is offered than any other evidence which the proponent can procure through reasonable efforts; and (C) the general purposes of these rules and the interests of justice will best be served by admission of the statement into evidence.

This is the residual or catch-all exception to the hearsay rule. Rule 804(b)(5) tracks exactly the language of Fed.R.Evid. 803(24). We sounded a note of caution in the use of this hearsay exception in United States v. Thevis, 665 F.2d 616, 629 (5th Cir.1982), observing that the language of the rule and the legislative history left no doubt of Congress' intent "that the 804(b)(5) residual exception was to be used only rarely, in truly exceptional circumstances." In Thevis we concluded that corroborated grand jury testimony which, "for one reason or another is unavailable at trial is neither rare nor exceptional." Id. Following the holding and rationale of Thevis we now conclude and hold that a government interview under a grant of use immunity which includes testimony the witness is unable or unwilling to repeat at trial is neither rare nor exceptional. Nor, as in the Thevis testimony, is it inherently trustworthy. Even though given under oath, or subject to the coercive strictures of 18 U.S.C. Sec. 1001, such interviews lack the expurgation of confrontation and cross-examination. Further, the grant of use immunity might occasion or encourage the conscious or unconscious embellishment of the recollection of the witness. The transcript of Connor's interview does not qualify for admission under the residual exception to the hearsay rule. ²

Plaintiffs' final argument on this point is that the transcript of Connor's interview should have been admitted for impeachment purposes. The trial court excluded the interview based on its conclusion that Pillsbury Co. v. Conboy prohibited all use of the immunized interview. Whether or not that decision prohibited the use of the immunized testimony, it certainly would have prevented the defendants from interrogating Connor on the content of the interview and prevented the defendants from attempting to establish that the true version of events was that given by Connor at the deposition, not the scenario he painted in the government interview when he was presumably serving his own ends in gaining immunity. Federal Rule of Evidence 613 prohibits the use of extrinsic evidence of a prior inconsistent statement unless two conditions are satisfied: the witness must be afforded an opportunity to explain or deny it, and the opposite party must be afforded an opportunity to interrogate him thereon. We need not consider whether Connor had an opportunity to explain or deny his prior statements but gave that up by...