Hancock Brothers, Inc. v. Jones

• Decision Date: 03 December 1968
• Docket Number: Misc. No. 3118.,Civ. No. 49700
• Citation: 293 F. Supp. 1229
• Parties: HANCOCK BROTHERS, INC., Plaintiff, v. Lyle L. JONES et al., Defendants. NGC AMUSEMENT CORP. et al., Plaintiffs, v. GLOBE TICKET COMPANY OF CALIFORNIA et al., Defendants.
• Court: U.S. District Court — Northern District of California

293 F. Supp. 1229

HANCOCK BROTHERS, INC., Plaintiff, v. Lyle L. JONES et al., Defendants.

NGC AMUSEMENT CORP. et al., Plaintiffs, v. GLOBE TICKET COMPANY OF CALIFORNIA et al., Defendants.

Civ. No. 49700, Misc. No. 3118.

United States District Court N. D. California.

December 3, 1968.

Steinhart, Goldberg, Feigenbaum & Ladar, Marvin D. Morgenstein, James T. Fousekis, San Francisco, Cal., for plaintiff Hancock Brothers, Inc.

Swerdlow, Glikbarg & Shimer, Richard H. Floum, Beverly Hills, Cal., for defendant NGC Amusement Corp.

Cecil F. Poole, U. S. Atty., Melvin J. Duvall, Jr., Asst. U. S. Atty., San Francisco, Cal., for defendant the United States.

MEMORANDUM AND ORDER

OLIVER J. CARTER, District Judge.

The question presented to this Court is whether or not certain pre-sentencing memoranda prepared by the San Francisco office of the Antitrust Division, United States Department of Justice, should be made a matter of public record. These reports were prepared in connection with the sentencing of the defendants in United States v. Hancock Brothers, Inc., et al., Criminal No. 41530.

During 1967, a Federal grand jury in the Northern District of California investigated the pricing practices of several companies engaged in the sale of tickets. On September 25, 1967, the grand jury returned indictments under Section 1 of the Sherman Act against Hancock Brothers, Inc., Globe Ticket Company of California, Dillingham Ticket Company, the president of Dillingham, and the general manager of Globe. Eventually, all five defendants tendered pleas of nolo contendere which were accepted by the court. Pre-sentencing reports were prepared for the court by the Probation Office. Included in this report was a memorandum prepared under the supervision of Mr. Lyle Jones, Chief of the San Francisco Office of the Antitrust Division, Department of Justice, in accordance with a request from Mr. Albert Wahl, Chief United States Probation Officer in San Francisco.

On January 26, 1968, Hancock Brothers, Inc. was sentenced to pay a fine of $20,000. The pre-sentence report prepared in connection with this sentencing was not made available to the defendant. On June 19, 1968, the other four defendants were also sentenced to pay fines. The report made in connection with these defendants was made available to defense counsel pursuant to the order of the court.

Civil treble damage actions have been brought under Section 4 of the Clayton Act against these same defendants. Plaintiffs in the civil action are seeking access to the pre-sentencing memoranda under Discovery Rule 34 of the Fed.R. Civ.P. Plaintiffs served a deposition subpoena duces tecum on various officials of the United States to have these documents produced. The United States has filed a motion for an order pursuant to Rule 45(b) of the Fed.R.Civ.P. to quash the subpoena. The United States has offered instead that, as to the report that had been disclosed to the defendants in the criminal proceedings, it "believes it may be appropriate and, therefore would not object if an order were entered making the presentencing report * * * part of the public record." Hancock Brothers, Inc., has filed an action for a declaratory judgment that disclosure of the documents in question is unauthorized and contrary to law. This Court is of the opinion that the documents in question should remain under the seal of confidentiality.

It is well-settled that liberality is a guiding principle in the construction of discovery rules. The requirement of full and timely disclosure is necessary for a just and speedy judicial determination of causes. Hickman v. Taylor, 329 U.S. 495, 67 S.Ct. 385, 91 L.Ed. 451 (1947). The fact that private individuals are seeking discovery of information obtained through government facilities does not ipso facto lessen the weight to be given this principle. This is especially true in private treble-damage antitrust actions, since these private actions are an important component of the public interest in "vigilant enforcement of the antitrust laws." Lawlor v. National Screen Service Corp., 349 U.S. 322, 329, 75 S.Ct 865, 869, 99 L.Ed. 1122 (1955). Congress has expressly manifested its intent to have private individuals capitalize on judgments in favor of the United States against defendants who violate the antitrust laws by providing in Section 5(a) of the Clayton Act, that such decrees under certain circumstances are prima facie evidence in subsequently-prosecuted private antitrust suits. A consent decree is made exempt from the prima facie effect of Section 5(a) but it does not serve to cast a shield of immunity against discovery procedures. Olympic Refining Co. v. Carter, 332 F.2d 260 (9th Cir. 1964). Thus, the plaintiffs here should be entitled to the information they seek were it not for opposing considerations which override the need for disclosure.

The information contained in the document being sought was obtained in proceedings before the grand jury. It is a firmly established policy of the law that acts of the grand jury and evidence taken before it are to be protected from public scrutiny. The grand jury's establishment in the Fifth Amendment of the United States Constitution "as the sole method for preferring charges in serious criminal cases * * * shows the high place it held as an instrument of justice." Costello v. United States, 350 U.S. 359, 362, 76 S.Ct. 406, 408, 100 L.Ed. 397 (1956). The rule of secrecy is a necessary one if the grand jury is to perform its functions effectively. Pittsburgh Plate Glass Co. v. United States, 360 U.S. 395, 400, 79 S.Ct. 1237, 3 L.Ed.2d 1323 (1959). The rule can be relaxed in the discretion of the court if the ends of justice require it. United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129 (1940); Fed.R.Crim.P. 6(e). Accordingly, the task placed before this Court is achieved by balancing the interests involved in maintaining secrecy of the grand jury proceedings with the interests involved in disclosing the documents in question.

The policy considerations behind grand jury secrecy were amply expounded in United States v. Amazon Ind. Chem. Corp., 55 F.2d 254 (D.Md.1931). Only one of the reasons stated for maintaining secrecy is applicable in this case, towit: to encourage free and untrammeled disclosures by persons who have information with respect to the commission of crimes. Clearly, this objective is curtailed if the information sought in this case is made a matter of public record.

Only if a compelling necessity has been shown with particularity would disclosure be proper. United States v. Proctor & Gamble Co., 356 U.S. 677, 681, 78 S.Ct. 983, 2 L.Ed.2d 1077 (1958). Cases allowing disclosure illustrate circumstances under which there is a compelling need to overcome the policy of grand jury secrecy. E. g., Atlantic City Electric Co. v. A. B. Chance Co., 313 F. 2d 431 (2d Cir. 1963); Commonwealth Edison Co. v. Allis Chalmers Manufacturing Co., 211 F.Supp. 729 (N.D.Ill. 1962); State of Washington, et al. v. American Pipe & Construction Co., 41 F. R.D. 59 (1966). The need for disclosure becomes particularly important when a defendant is seeking access to grand jury information in connection with a criminal prosecution against him. See, Dennis v. United States, 384 U.S. 855, 86 S.Ct. 1840, 16 L.Ed.2d 973 (1966).

No compelling necessity for disclosure has been made apparent to the Court in this case. The only reasons for disclosure advanced by the plaintiffs here are the avoidance of expense and additional work, in order to recoup alleged financial losses in civil actions. This advantageous use of discovery procedures exists in every civil suit that follows a decree in favor of the government based on violation of the antitrust laws. Mere convenience is not enough to encroach upon the secrecy of grand jury proceedings. In re Holovachka, 317 F. 2d 834 (7th Cir. 1963); In the Matter of April 1956 Term Grand Jury, 239 F.2d 263, 268 (7th Cir. 1956), rehearing den. 1956, cert. den; Shotwell Mfg. Co. v. United States, 352 U.S. 998, 77 S.Ct. 552, 1 L.Ed.2d 544 (1957); City of Philadelphia v. Westinghouse Electric Corp., 210 F.Supp. 486 (E.D.Pa.1962); Application of State of California to Inspect Grand Jury Subpoenas, 195 F. Supp. 37 (E.D.Pa.1961).

In this case, another reason exists why the information sought should not be made a matter of public record. The document in question was prepared at the request of the Probation Office for inclusion in the pre-sentencing report presented to the court. A probation report is an essential aid to a sentencing judge in determining a just and proper sentence. If the confidential nature of a probation report is not protected, a serious curtailment could result in information now made available to sentencing judges. Hoover v. United States, 268 F.2d 787 (10th Cir. 1959); United States v. Durham, 181 F.Supp. 503 (D.C. 1960), cert. den. 364 U.S. 854, 81 S.Ct. 83, 5 L.Ed. 77 (1960); United States v. Greathouse, 188 F.Supp. 765 (Ala.1960); Dillon v. United States, 307 F.2d 445 (9th Cir. 1962) (Barnes, J., dissenting); Barnet and Gronewold, Confidentiality of the Pre-sentence Report, 26 Fed.Prob. 26 (1962). "To deprive sentencing judges of this kind of information would undermine modern penalogical procedural policies that have been cautiously adopted throughout the nation after careful consideration and experimentation." Williams v. People of State of New York, 337 U.S. 241, 249-250, 69 S.Ct. 1079, 1084, 93 L.Ed. 1337 (1949).

Confidentiality of a probation report is not absolute, however. Fed.R.Crim.P. 32(c) (2) provides:

"The court * * * may disclose to the defendant or his counsel all or part of the material contained in the report of the presentence investigation and afford an opportunity to the defendant or his counsel to comment thereon."

Disclosure to the defendant in a criminal action is considered necessary in many instances. Rule 32 of the...