Kaufman v. Edelstein

Citation539 F.2d 811
Decision Date20 April 1976
Docket Number935,942 and 943,Nos. 934,D,s. 934
Parties1976-1 Trade Cases 60,841, 2 Fed. R. Evid. Serv. 546 Felix KAUFMAN and Frederic G. Withington, Petitioners, v. Hon. David N. EDELSTEIN, Chief Judge, United States District Court for the Southern District of New York, Respondent. UNITED STATES of America, Plaintiff-Appellee, v. INTERNATIONAL BUSINESS MACHINES CORPORATION, Defendant. Felix Kaufman and Frederic G. Withington, Appellants. ockets 76-3008, 76-3009, 76-6017 and 76-6024.
CourtU.S. Court of Appeals — Second Circuit

Powell Pierpoint, New York City (Hughes, Hubbard & Reed, and David F. Hixson, New York City, of counsel), for petitioner Felix Kaufman.

Robert B. Davidson, New York City (Baker & McKenzie, New York City, of counsel), for petitioner Frederic G. Withington.

Robert B. Nicholson, Dept. of Justice, Washington, D.C. (Thomas E. Kauper, Asst. Atty. Gen., John J. Powers, III, Raymond M. Carlson, Eugene M. Katz, and Grant G. Moy, Jr., Dept. of Justice, Washington, D.C.), for appellee.

Kenneth J. Bialkin, Howard C. Buschman, III, and Willkie, Farr & Gallagher, New York City, for The American Institute of Certified Public Accountants, amicus curiae.

Before FRIENDLY, MULLIGAN and GURFEIN, Circuit Judges.

FRIENDLY, Circuit Judge:

We have here appeals from and petitions for mandamus to vacate two orders of Chief Judge Edelstein in the Government's civil antitrust action in the District Court for the Southern District of New York against International Business Machines Corporation (IBM). These orders denied motions to quash subpoenas directing Felix Kaufman, a partner in the international accounting firm of Coopers & Lybrand, and Frederic G. Withington, a senior staff member of the well-known management consulting firm of Arthur D. Little, Inc., to appear and testify on behalf of the Government. The issue is entirely between the United States on the one hand and Dr. Kaufman and Mr. Withington on the other; IBM has taken no position either in the District Court or here.

As the cases now stand, the sole issue sought to be raised on the merits is whether Dr. Kaufman and Mr. Withington are entitled to be excused from responding to the subpoenas because the Government is seeking to interrogate them on the basis of their expert knowledge of the computer industry. In affidavits opposing the motions to quash the subpoenas, the Government stated its desire as being to develop testimony "concerning the nature and structure of the general purpose electronic digital computer systems market, and of the electronic data processing industry in general" a subject on which petitioners are highly qualified. 1 So far as concerned opinion testimony, the Government made clear that it would not require appellants to state their present opinions but rather "prior opinions expressed during the period from 1960 through 1972." In its brief here the Government has somewhat amplified the range of the proposed testimony; it intends also to ask the witnesses "to explain the nature of their duties as computer systems consultants, and especially to recount the advice which they gave to various users and potential users of computer systems." It states, however, that the witnesses "will not be asked at trial for their expert evaluation of the government's evidence" and that "their testimony will be confined to events which occurred between 1960-1972." It is not seeking to have either witness or his firm conduct any examinations or undertake any special studies in preparation for trial.

The Government also states in brief that it "will pay both witnesses as experts for their services" in amounts to be negotiated between them and Government counsel. According to the Government's affidavits, although contested in part by petitioners, both witnesses had initially agreed to testify but later declined at the direction of their firms. Although some claims on the score of conflict of interest were raised in the district court, these have not been pressed on appeal. 2 The issue on the merits is posed most bluntly in the concluding paragraph of Mr. Withington's affidavit "the government is seeking the very core of my expertise which I do not wish to provide and which I consider to be a proprietary asset available solely to my employer or to those for whom I wish to work."

Chief Judge Edelstein, in opinions, denied the motions to quash. His rulings were based largely on statements in this court's opinion in Carter-Wallace, Inc. v. Otte, 474 F.2d 529, 536 (2 Cir. 1972), cert. denied, 412 U.S. 929, 93 S.Ct. 2753, 37 L.Ed.2d 156 (1973), which are discussed below. He added "that an even stronger basis may be said to exist in the case at bar for recognizing the court's power to compel expert testimony than existed in Carter-Wallace," since "(t)his is not an attempt by a litigant in a private controversy to support its case through the assistance of an unwilling expert" but "an attempt by the United States to summon a member of the public to testify in a major government antitrust case, a case which, by definition, greatly affects the commonweal," citing Pennsylvania Co. for Insurances On Lives and Granting Annuities v. City of Philadelphia, 262 Pa. 439, 441, 105 A. 630 (1918). Dr. Kaufman and Mr. Withington have appealed and also have petitioned for writs of mandamus to require Chief Judge Edelstein to grant their motions. The United States has moved to dismiss the appeals for want of jurisdiction and asks us to deny the petitions both on that ground and on the basis that this is not a proper case for mandamus. If we should reach the merits, it contends that the district court's decision was right.

Appealability

Our jurisdiction of appeals in government civil antitrust cases is governed by the 1974 amendment to the Expediting Act, 15 U.S.C. § 29. This, so far as here relevant, provides:

(a) Except as otherwise expressly provided by this section, in every civil action brought in any district court of the United States under the Act entitled "An Act to protect trade and commerce against unlawful restraints and monopolies", approved July 2, 1890, or any other Acts having like purpose that have been or hereafter may be enacted, in which the United States is the complainant and equitable relief is sought, any appeal from a final judgment entered in any such action shall be taken to the court of appeals pursuant to sections 1291 and 2107 of Title 28. Any appeal from an interlocutory order entered in any such action shall be taken to the court of appeals pursuant to sections 1292(a)(1) and 2107 of Title 28 but not otherwise.

One would have supposed it to be beyond argument that, despite Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546-47, 69 S.Ct. 1221, 1225-1226, 93 L.Ed. 1528, 1536-1537 (1949), "An order compelling testimony . . . in an ordinary civil or criminal action is neither a final order (under § 1291) nor an interlocutory order granting an injunction (under § 1292(a)(1)) and it is not appealable. This is the oft-cited rule of Alexander v. United States (201 U.S. 117, 26 S.Ct. 356, 50 L.Ed. 686 (1906))." 9 Moore, Federal Practice P 110.13(2) at 153-54 (Ward ed. 1975). The remedy of the party witness wishing to appeal is to refuse to answer and subject himself to criminal contempt; that of the non-party witness is to refuse to answer and subject himself to civil or criminal contempt. Id. at P 110.13(4) at 165-66. We have applied this rule in many cases of non-party witnesses, in one of which, United States v. Fried, 386 F.2d 691, 694 (2 Cir. 1967), we specifically rejected a contrary view expressed in Covey Oil Co. v. Continental Oil Co., 340 F.2d 993, 996-97 (10 Cir.), cert. denied, 380 U.S. 964, 85 S.Ct. 1110, 14 L.Ed.2d 155 (1965) as four other circuits have done, Ryan v. CIR, 517 F.2d 13, 18-20 (7 Cir.), cert. denied, 423 U.S. 892, 96 S.Ct. 190, 46 L.Ed.2d 124 (1975); Gialde v. Time, Inc., 480 F.2d 1295, 1300-01 (8 Cir. 1973); United States v. Anderson, 150 U.S.App.D.C. 336, 464 F.2d 1390 (D.C. Cir. 1972); Borden Co. v. Sylk, 410 F.2d 843, 846 (3 Cir. 1969). The doctrine has since been reaffirmed by a unanimous Court in United States v. Ryan, 402 U.S. 530, 91 S.Ct. 1580, 29 L.Ed.2d 85 (1971), and was again recognized in United States v. Nixon, 418 U.S. 683, 690-92, 94 S.Ct. 3090, 3098-99, 41 L.Ed.2d 1039, 1053-54 (1974), although the Court, for reasons stated in its opinion which are wholly inapplicable here, made an exception where the subpoena was directed to the President of the United States.

Apart from a suggestion that the rule against appeals from orders refusing to quash subpoenas is limited to appeals from such orders in criminal cases, an assertion contradicted by Alexander itself which concerned a subpoena issued in a government civil antitrust case, as well as by Fried, appellants' sole reliance for our departing from the established rule is the discussion in the majority opinion in International Business Machines Corp. v. United States, 471 F.2d 507, 511-16 (2 Cir. 1972), a case which concerned an order requiring the production of documents by a party, and which, on the merits, turned on issues of privilege and waiver thereof. The majority held that the order was appealable under Cohen's gloss on § 1291, relying in part on the discussion in Covey Oil. At best this was an alternative holding, since the majority also found that it had power to issue mandamus, under 28 U.S.C. § 1651, 471 F.2d at 516-17. More to the point, the opinion failed to state the basis upon which Fried and Ryan were thought to be inapplicable, although these cases had been correctly cited by the Government as directly rejecting Covey Oil. These cases were again pressed in the Government's Petition for Rehearing, although they were not in terms discussed in the subsequent en banc opinion, 480 F.2d 293 (1973), cert. denied, 416 U.S. 979, 980, 94 S.Ct. 2413, 40 L.Ed.2d 776 (1974), in...

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