Corrugated Container Antitrust Litigation, In re

• Decision Date: 28 August 1981
• Docket Number: LITIGATION-J,No. 81-1443,81-1443
• Citation: 662 F.2d 875
• Parties: , 1981-2 Trade Cases 64,272 In re CORRUGATED CONTAINER ANTITRUSTohn W. Culy, Appellant.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 875

662 F.2d 875

213 U.S.App.D.C. 319, 1981-2 Trade Cases 64,272

In re CORRUGATED CONTAINER ANTITRUST LITIGATION-John W. Culy, Appellant.

No. 81-1443.

United States Court of Appeals District of Columbia Circuit.

Argued June 24, 1981.

Decided Aug. 28, 1981.

On Appeal from an order issued from the District Court for the Southern District of Texas by the presiding judge in MDL-310 exercising the powers of the United States District Court for the District of Columbia (Southern District of Texas Civil MDL-310).

Steven P. Handler, Chicago, Ill., with whom George Vernon and Richard A. Sloan, Chicago, Ill., were on the brief, for appellant.

Jerrold E. Salzman, Chicago, Ill., for appellees.

Before: WALD and MIKVA, Circuit Judges and MARKEY ^*, Chief Judge, United States Court of Customs and Patent Appeals.

Opinion for the Court filed by Circuit Judge WALD.

WALD, Circuit Judge:

This case is an appeal from an order of civil contempt entered against John W. Culy (appellant), a non-party witness, as a result of his invocation of the fifth amendment privilege against self-incrimination and his refusal to answer certain questions at a deposition taken in Washington, D.C. in connection with multidistrict civil litigation concerning alleged price-fixing in the corrugated paper industry. The contempt order was issued over the telephone from the United States District Court for the Southern District of Texas by the presiding judge in In Re Corrugated Container Antitrust Litigation, M.D.L. No. 310, exercising the powers of the United States District Court for the District of Columbia pursuant to 28 U.S.C. § 1407(b). For the reasons stated below we hold that jurisdiction over the appeal properly lies in the District of Columbia Circuit but we vacate the order of civil contempt.

I. BACKGROUND

During his career, appellant has worked for several different companies in the corrugated container industry. Before 1976-the critical period in the controversy-he was employed by the Weyerhaeuser Company (Weyerhaeuser) and the Corrugated Container Company (CORCO), two of the defendants in pending civil antitrust suits. From 1968 to mid-1970 appellant was sales representative and later sales manager of Weyerhaeuser's sales office in Indianapolis, Indiana. From mid-1970 through early 1972 he was assistant sales manager of the Weyerhaeuser plant in Columbus, Indiana. From early 1972 through February 1976 he was sales manager and later general manager of CORCO's plant in Muncie, Indiana. Appellant left CORCO in 1976 to become general sales manager of the Indiana Box Corporation (Indiana Box). He is currently the regional sales manager of the Anderson Box Company (Anderson Box) in Staunton, Virginia. Anderson Box is a subsidiary of Inland Container which is also a defendant in the civil antitrust cases.

In October, 1977 appellant voluntarily submitted to an interview in Dallas, Texas by an FBI agent and his associate (a law student) in connection with a federal criminal investigation of antitrust violations in the corrugated container industry. Appellant was informed that the interviewers were empowered to act as agents of a grand jury, which had instructed them to conduct appellant's interview. During the interview appellant was orally advised that he would not be prosecuted for any of the statements or testimony that he gave. ¹ Appellant was not placed under oath. A transcript was later prepared from a tape recording of the interview. Appellant was not subpoenaed to appear and he did not testify before the grand jury. Instead, the interview transcript was given to the grand jury.

In January, 1978 a federal grand jury in Houston, Texas indicted fourteen companies and twenty-six individuals for an alleged nationwide conspiracy to fix prices in the corrugated container industry. These consolidated cases were assigned to Chief Judge John V. Singleton of the United States District Court for the Southern District of Texas. Appellant was not indicted at that time and he has not subsequently been prosecuted for any offense. In the ensuing criminal trial, a jury acquitted of all charges each defendant who stood trial. Appellant did not testify at the trial.

While the grand jury investigation and the subsequent criminal trial were in progress, purchasers of corrugated products filed numerous class and non-class actions in various United States District Courts throughout the country. These actions alleged the same type of nationwide price-fixing conspiracy as alleged in the criminal cases. The defendants in the civil actions included the companies named in the criminal indictments as well as a number of companies that were not indicted. Pursuant to 28 U.S.C. § 1407, the Judicial Panel for Multidistrict Litigation consolidated these civil actions in the Southern District of Texas as In Re Corrugated Container Antitrust Litigation, M.D.L. 310, and assigned this litigation to Judge Singleton for pretrial proceedings.

The class action civil cases now have been either tried or settled. ² However, a number of opt-out cases remain pending before Judge Singleton. In the course of discovery, opt-out plaintiffs (appellees) noticed the deposition of appellant for April 3, 1981 in Washington, D.C. Appellant was not subpoenaed but appeared voluntarily in response to the notice of deposition.

At his deposition appellant, upon the advice of counsel, asserted his fifth amendment privilege with respect to pricing and price communications occurring prior to 1975, while he was employed by Weyerhaeuser and CORCO, on the grounds that the answers to appellees' questions would tend to incriminate him. The questions appellant refused to answer were either taken verbatim from, or closely tracked, the transcript of the 1977 FBI interview submitted to the grand jury, portions of which had been previously released to appellees. ³

Upon appellant's refusal to answer the questions in dispute, appellees' counsel telephoned Judge Singleton on-the-spot and moved to compel appellant to answer. After hearing argument from both sides and questioning appellant over the phone the judge expressly invoked his authority to exercise the powers of the District Court for the District of Columbia pursuant to 28 U.S.C. § 1407(b) and ordered appellant to answer six specific questions. However, appellant persisted in his assertion of the fifth amendment privilege. Judge Singleton then held appellant in civil contempt, sentenced him to six months in jail and fined him $5,000. ⁴ Judge Singleton suspended imposition of sentence pending appeal and ruled that appellant would have a chance to purge himself of contempt if the court of appeals affirmed the contempt order. ⁵ This appeal followed.

II. JURISDICTION

The initial question concerns which circuit court has jurisdiction over this appeal. The general appellate jurisdiction statute, 28 U.S.C. § 1294, states that:

Appeals from reviewable decisions of the district and territorial courts shall be taken as follows:

(1) From a district court of the United States to the court of appeals for the circuit embracing the district....

The multidistrict litigation statute provides in relevant part:

The judge or judges to whom such (multidistrict) actions are assigned, ... may exercise the powers of a district judge in any district for the purpose of conducting pretrial depositions in such coordinated or consolidated pretrial proceedings.

28 U.S.C. § 1407(b). Thus, the precise issue before us is whether an appeal from a multidistrict litigation transferee judge's order of contempt issued over the telephone from the transferee judge's home district in Texas to a non-party witness being deposed in Washington, D.C. should be taken in the Fifth Circuit which embraces the transferee district or in the District of Columbia Circuit which embraces the deposition district. It is clear to us that the District of Columbia Circuit has jurisdiction because the contempt order was issued pursuant to the exercise by Judge Singleton of the powers of a district judge in the District of Columbia rather than in his capacity as a sitting judge in the Southern District of Texas where the multidistrict litigation is now based. Our conclusion as to the appropriate appellate forum is in accord with the Fifth Circuit's earlier ruling that it lacked jurisdiction over this appellant, ⁶ as well as the prior jurisdictional rulings by the Second, Fifth, and Seventh Circuits with respect to similar appeals by other non-party deponents in this same multidistrict litigation. ⁷

A. Section 1407's Limited Grant of Power

In our federal judicial system, judges of a particular district court may exercise their authority only within that district except under specific limited designations permitted by statute. See, e. g., 28 U.S.C. §§ 292, 295, 296. ⁸ When so designated, the judge sits as a judge of the court to which he is assigned, but he does not exercise extraterritorial jurisdiction in his capacity as a judge of his home court to which he is permanently assigned.

Section 1407, which established special procedures allowing the transfer of pretrial proceedings in multidistrict litigation, contains two kinds of authority. One is for the transfer of pending causes of action from one district to another district for pretrial purposes only. 28 U.S.C. § 1407(a). ⁹ The judge who is assigned to preside over the transferred action exercises his authority as a member of the district court to which the action has been transferred. Congress believed

that the possibility for conflict and duplication in discovery and other pretrial procedures in related cases (could) be avoided or minimized by ... centralized management. To accomplish this objection the (statute) provides for the transfer of venue of an action for the limited purpose of conducting coordinated pretrial proceedings.

H.R. Rep. No. 1130, 90th Cong., 2d Sess. 2 (1968) U.S. Code Cong. & Admin.News 1968, pp. 1898, 1899....