Douglas Oil Company of California v. Petrol Stops Northwest
| Decision Date | 18 April 1979 |
| Docket Number | No. 77-1547,77-1547 |
| Citation | 441 U.S. 211,60 L.Ed.2d 156,99 S.Ct. 1667 |
| Parties | DOUGLAS OIL COMPANY OF CALIFORNIA et al., Petitioners, v. PETROL STOPS NORTHWEST et al |
| Court | U.S. Supreme Court |
Respondents are independent gasoline dealers, one of which operates in Arizona and several other States, and two of which operate in the vicinity of Tucson, Ariz. They brought civil antitrust actions in the District Court in Arizona against several large oil companies, including petitioners. While these proceedings were in pretrial stages, a Government antitrust investigation in the Central District of California culminated in an indictment for illegal price fixing in California, Arizona, and elsewhere, of petitioners and several other large oil companies, all of which ultimately pleaded nolo contendere. After unavailing discovery requests, respondents petitioned the District Court for the Central District of California to order release of certain grand jury transcripts under Fed.Rule Crim.Proc. 6(e)(2)(C)(i), which provides for disclosure of grand jury transcripts "when so directed by a court preliminarily to or in connection with a judicial proceeding." The Antitrust Division did not object to the disclosure. Over petitioners' objection, the transcripts' release was ordered by the District Court for the Central District of California, subject to various protective conditions. The Court of Appeals affirmed, relying upon United States v. Procter & Gamble Co., 356 U.S. 677, 78 S.Ct. 983, 2 L.Ed.2d 1077, which held that parties seeking grand jury transcripts must show that the material sought is needed to avoid a possible injustice in another judicial proceeding; that the disclosure need exceeds the need for continued secrecy; and that the disclosure request covers only the material needed. The court found that continued grand jury secrecy was not a substantial factor as the grand jury proceeding had concluded three years before and the transcripts had already been released to petitioners. Although the court conceded that it knew little about the Arizona proceedings, it speculated that the transcripts would facilitate prosecution of the civil suits.
Held:
1. The courts below did not err in selecting the standard governing disclosure of grand jury transcripts under Rule 6(e). Though the veil of grand jury secrecy should not be lifted unnecessarily, it is recognized that in some situations justice may demand that discrete portions of transcripts be made available in subsequent proceedings. Here the California District Court made clear that it had to be demonstrated that a particularized need for disclosure outweighed the interest in continued grand jury secrecy, and the Court of Appeals correctly understood the standard applied in Procter & Gamble, supra. Pp. 217-224.
2. In this case, however, the California District Court having custody of the grand jury transcripts abused its discretion in issuing the disclosure order, for that court concededly had no dependable knowledge of the status of, and the needs of the parties in, the Arizona civil suits. The court based its decision largely upon unsupported assertions of counsel during oral argument, supplemented by other inadequate data such as the criminal indictment and the civil complaints. Even a comparison of those documents did not clearly show what portions, if any, of the transcripts would be pertinent to the Arizona actions, which involved only some of the same parties and only some of the same territory as were involved in the criminal case. Under these circumstances, the better practice would have been for the California District Court, after making a written evaluation of the need for continued grand jury secrecy and a determination that the limited evidence before it showed that disclosure might be appropriate, to send the requested materials to the Arizona District Court where the civil cases were pending. Pp. 224-231.
571 F.2d 1127, reversed and remanded.
Max L. Gillam, Los Angeles, Cal., for petitioners.
Daniel L. Berman, Salt Lake City, Utah, for private respondents.
Sara S. Beale, Detroit, Mich., for respondent U. S.
This case presents two intertwined questions concerning a civil litigant's right to obtain transcripts 1 of federal criminal grand jury proceedings. First, what justification for disclosure must a private party show in order to overcome the presumption of grand jury secrecy applicable to such transcripts? Second, what court should assess the strength of this showing—the court where the civil action is pending, or the court that acts as custodian of the grand jury documents?
Respondent Petrol Stops Northwest is a gasoline retailer unaffiliated with any major oil company. In 1973, it operated 104 service stations located in Arizona, California, Oregon, Washington, and several other States. On December 13, 1973, respondent filed an antitrust action in the District of Arizona against 12 large oil companies, including petitioners Douglas Oil Co. of California and Phillips Petroleum Co.2 In its complaint, respondent alleged that on January 1, 1973, there had been a sharp reduction in the amount of gasoline offered for sale to it, and that this reduction had resulted from a conspiracy among the oil companies to restrain trade in gasoline, in violation of §§ 1 and 2 of the Sherman Act. 26 Stat. 209, as amended, 15 U.S.C. §§ 1, 2. As a part of this conspiracy, respondent charged, petitioners and their codefendants had fixed the prices of gasoline at the retail and wholesale distribution levels in California, Oregon and Washington.3 Respondents Gas-A-Tron of Arizona and Coinoco also independently sell gasoline through service stations they own or lease. Unlike respondent Petrol Stops Northwest, however, their operations are limited to the vicinity of Tucson, Ariz. On November 2, 1973, Gas-A-Tron and Coinoco filed an antitrust complaint in the District of Arizona naming as defendants nine large oil companies, including petitioner Phillips Petroleum Co.4 Like respondent Petrol Stops Northwest, Gas-A-Tron and Coinco alleged that as of January 1, 1973, their supply of gasoline had been sharply reduced, and attributed this reduction to a conspiracy to restrain trade in violation of the Sherman Act. The specific charges of illegal behavior asserted by the two retailers substantially paralleled those made by Petrol Stops Northwest in its complaint, and included an allegation that the defendants had fixed the price of gasoline at the wholesale and retail levels.5
Although the issues and defendants in the two actions were substantially the same, the cases were assigned to two different judges in the District of Arizona. In February 1974, respondents served upon petitioners a set of interrogatories which included a request that petitioners state whether either of their companies at any time between January 1, 1968, and December 14, 1974, (sic), had had any communication with any of their competitors concerning the wholesale price of gasoline to be sold to unaffiliated retailers. Petitioners also were asked to produce any documents they had concerning such communications. Petitioners responded that they were aware of no such communications, and therefore could produce no documents pertinent to the request.6
In the meantime, the Antitrust Division of the Department of Justice had been investigating since 1972 the pricing behavior on the west coast of several major oil companies, including petitioners. See App. 26. As part of this investigation, employees of petitioners were called to testify before a grand jury empaneled in the Central District of California. The Government's investigation culminated on March 19, 1975, when the grand jury returned an indictment charging petitioners and four other oil companies with having conspired to fix the price of "rebrand gasoline" in California, Oregon, Washington, Nevada, and Arizona.7 The indictment alleged that the price-fixing conspiracy had begun in July 1970 and had continued at least until the end of 1971.
Although initially all six defendants charged in the criminal indictment pleaded not guilty, by December 1975, each had pleaded nolo contendere and was fined $50,000. Before changing their pleas, petitioners, acting pursuant to Fed.Rule Crim.Proc. 16(a)(1)(A), asked the District Court for the Central District of California to give them copies of the transcripts of testimony given by their employees before the grand jury. Their request was granted, and it appears that petitioners continue to possess copies of these transcripts.
In October 1976, respondents served upon petitioners requests under Fed.Rule Civ.Proc. 34 for production of the grand jury transcripts in petitioners' possession. Petitioners objected to the requests for production, arguing that the transcripts were not relevant to the private antitrust actions and that they were not likely to lead to any admissible evidence. Respondents did not pursue their discovery requests by making a motion in the Arizona trial court under Fed.Rule Civ.Proc. 37 to compel discovery. See n. 17, infra. Rather, they filed a petition in the District Court for the Central District of California asking that court, as guardian of the grand jury transcripts under Fed.Rule Crim.Proc. 6(e), to order them released to respondents. An attorney from the Antitrust Division of the Department of Justice appeared and indicated that the Government had no objection to respondents' receiving the transcripts already made available to petitioners under Fed.Rule Crim.Proc. 16(a)(1)(A). He suggested to the court, however, that the real parties in interest were petitioners, and therefore that they should be given an opportunity to be heard. The California District Court accepted this suggestion, and petitioners participated in the proceedings as parties adverse to respondents.
After briefing and oral argument, the court...
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