State of Ill. v. F.E. Moran, Inc.

• Decision Date: 12 September 1984
• Docket Number: No. 83-1594,83-1594
• Citation: 740 F.2d 533
• Parties: , 1984-2 Trade Cases 66,124 The STATE OF ILLINOIS, et al., Plaintiffs-Appellees, v. F.E. MORAN, INC., and Owen A. Moran, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 533

740 F.2d 533

39 Fed.R.Serv.2d 860, 1984-2 Trade Cases 66,124

The STATE OF ILLINOIS, et al., Plaintiffs-Appellees, v. F.E. MORAN, INC., and Owen A. Moran, Defendants-Appellants.

No. 83-1594.

United States Court of Appeals, Seventh Circuit.

Argued March 27, 1984.

Decided July 24, 1984.

As Amended Aug. 3, 1984.

Rehearing and Rehearing En Banc Denied Sept 12, 1984.

Claudia J. Lovelette, Ross & Hardies, Chicago, Ill., for defendants-appellants.

Thomas J. DeMay, Asst. Atty. Gen., Chicago, Ill., for plaintiffs-appellees.

Before PELL, CUDAHY, and POSNER, Circuit Judges.

POSNER, Circuit Judge.

Two defendants in this antitrust damage action (actually a consolidation of several actions, but we shall treat them as one) ask us to reverse an order by the district court made under Rule 6(e)(3)(C)(i) of the Federal Rules of Criminal Procedure. The order directed the Justice Department to turn over to the plaintiffs the transcript of the testimony of two witnesses before the grand jury that had indicted the corporate defendant for criminally violating the antitrust laws. We must consider the appealability of the order, the defendants' standing to contest it, and if those hurdles are cleared the merits of the order.

Rule 6(e)(3)(D) authorizes the filing, in the federal district where the grand jury was convened, of a petition for disclosure of matters occurring before the grand jury. If the petition is filed in the federal criminal proceeding that follows indictment by the grand jury, the order granting or denying the petition is an interlocutory order respecting discovery and cannot be appealed under 28 U.S.C. Sec. 1291, which makes "final decisions" of district courts appealable to the courts of appeals. See In re Grand Jury Proceedings, Miller Brewing Co., 687 F.2d 1079, 1085 (7th Cir.1982), modified on other grounds, 717 F.2d 1136 (1983); United States v. Carney, 665 F.2d 1064, 1065 (D.C.Cir.1981) (per curiam); 9 Moore's Federal Practice p 110.13, at p. 193 (2d ed. 1983). But if instead the petitioner is asking the court in which the grand jury was convened to give him access to the grand jury transcript for use in a civil suit, the order disposing of it is a final decision under section 1291. E.g., Illinois v. Abbott & Associates, Inc., 460 U.S. 557, 103 S.Ct. 1356, 1360 n. 9, 75 L.Ed.2d 281 (1983); Illinois v. Sarbaugh, 552 F.2d 768, 773-74 (7th Cir.1977); In re Grand Jury Matter Impounded, 703 F.2d 56, 59-62 (3d Cir.1983); In re Sells, 719 F.2d 985, 988 (9th Cir.1983); In re Corrugated Container Antitrust Litigation, 687 F.2d 52, 53-54 (5th Cir.1982). The latter is, at least approximately, the situation here. The plaintiffs in this antitrust case--who of course were not parties to the criminal proceeding--settled the case with some of the defendants, and the settlement agreements contained provisions requiring the individual (as distinct from corporate) settling defendants to testify in the civil action. The plaintiffs later filed in the civil action this petition seeking access to the transcripts of the testimony that two of the settling and one of the nonsettling defendants had given before the grand jury. The nonsettling defendants who are the appellants in this court objected to disclosure. The petition was heard by the district judge presiding over the antitrust case (Judge Shadur), and he granted it as to the settling defendants. The district in which the civil case is pending and the district where the grand jury had been convened are the same. The criminal proceeding is long since over.

What makes this case different from the standard Rule 6(e)(3)(C)(i) case, illustrated by Abbott, is that here the petition was filed with the judge presiding in the civil case in which the grand jury transcript was to be used as an aid in discovery. In Abbott, the petition (filed, though on different grounds, by a plaintiff in the same antitrust suit in which the petition before us was filed) had been denied by the chief judge of the district where the grand jury had been convened--that is, by the judge supervising the grand jury, see N.D.Ill.Crim.R. 1.04(A)--rather than by the judge presiding over the civil suit. See also Douglas Oil Co. v. Petrol Stops Northwest, 441 U.S. 211, 216, 99 S.Ct. 1667, 1671, 60 L.Ed.2d 156 (1979); id. at 233, 99 S.Ct. at 1680 (concurring opinion). The Supreme Court in Abbott noted noncommittally that "further disclosure requests would be filed with the district judges presiding over the state's civil antitrust actions...." 103 S.Ct. at 1360 n. 9. The chief judge then transferred his responsibilities as supervisor of the grand jury proceedings to Judge Shadur to facilitate Judge Shadur's acting on such requests. This appeal grows out of one of those requests. Judge Shadur's order is therefore most naturally viewed as a discovery order in the antitrust civil action, and discovery orders as a general rule are not appealable. See Wright, The Law of Federal Courts 550-51 (4th ed. 1983).

But no court has suggested that the identity of the ordering judge determines the appealability of a grand jury disclosure order, although there are intimations of such a view in Justice Rehnquist's concurring opinion in the Douglas Oil case. See 441 U.S. at 232-33, 99 S.Ct. at 1679-80. In re Corrugated Container Antitrust Litigation, supra, was a case like this where the judge presiding over the civil suit issued the order to assist in discovery in the suit, and yet the court held the order appealable without even remarking this feature. We agree that such orders are appealable. Although a discovery order cannot be appealed directly, when as in the usual case the order is directed against a party he can refuse to obey it and can get appellate review by appealing the order of criminal contempt punishing him for his refusal. See, e.g., Cobbledick v. United States, 309 U.S. 323, 328, 60 S.Ct. 540, 542, 84 L.Ed. 783 (1940); 15 Wright, Miller & Cooper, Federal Practice and Procedure Sec. 3914, at p. 569 (1976). So there is a safety valve. But someone--whether or not a party--who does not want his grand jury testimony disclosed, or as in this case does not want the grand jury testimony of his adversaries' witnesses disclosed, cannot resist compliance with the district court's disclosure order, and therefore cannot provoke a contempt judgment against him, because he does not have possession of the transcript. Either the court in which the grand jury was convened does or the Justice Department does, and therefore if the court orders the transcript disclosed there is no way for anyone (except the Department) who is affected by the order to set the stage for an appeal by resisting the order and being held in contempt. This is true, of course, even if the witness in question is a party or witness in a criminal proceeding. But the Supreme Court, attaching great importance to expediting criminal proceedings, has held that the policy against interlocutory criminal appeals outweighs the policy of allowing immediate appellate review of orders that impair substantial rights. See, e.g., DiBella v. United States, 369 U.S. 121, 82 S.Ct. 654, 7 L.Ed.2d 614 (1962); Flanagan v. United States, --- U.S. ----, 104 S.Ct. 1051, 1054, 79 L.Ed.2d 288 (1984). And in the criminal context it should make no difference that the petition for disclosure of matters before the grand jury was separately docketed or even that it was filed in a separate court, though in the latter situation appeals were allowed (probably incorrectly, as we shall see) in United States v. Byoir, 147 F.2d 336, 337 (5th Cir.1945), and Gibson v. United States, 403 F.2d 166, 167 (D.C.Cir.1968). The objection to allowing an appeal is the same in either case: it would delay the criminal proceeding. Cf. In re Grand Jury Investigation of Violations of 18 U.S.C. Sec. 1621 (Perjury), 318 F.2d 533, 535 (2d Cir.1963).

Our conclusion that an order to disclose grand jury testimony is appealable (as long as the appeal will not delay, or, we suppose, interfere with) a criminal proceeding gains additional support from the "collateral order" doctrine of Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). Indeed, the conclusion is more candidly based on that doctrine than on the fiction that an order granting a Rule 6(e)(3)(C)(i) petition is a "final decision" just because it disposes of a separately docketed proceeding. As we explained recently in In re UNR Industries, Inc., 725 F.2d 1111, 1117-18 (7th Cir.1984), the Cohen doctrine allows the appeal under section 1291 of orders that cause irreparable harm to the appellant but do not fit the technical definition of an injunction and so are not appealable under section 1292(a)(1). An order disclosing testimony before a grand jury is such an order. This is not because the harm done to the witness is irreparable (there may in fact be no harm done to him at all), but because any harm to interests sought to be protected by keeping grand jury proceedings secret cannot be undone by a later reversal of the district court's order.

Consistent with our analysis, courts occasionally allow appeal of discovery orders where the contempt route is for one reason or another closed. See, e.g., In re Berkley & Co., 629 F.2d 548, 551 (8th Cir.1980); Socialist Workers Party v. Grubisic, 604 F.2d 1005, 1007-08 (7th Cir.1979) (per curiam); American Tel. & Tel. Co. v. Grady, 594 F.2d 594, 596 (7th Cir.1979) (per curiam). They do this even though, if the contempt route is closed, the party complaining of the disclosure order can still invite the entry of a final judgment (with prejudice) against him before the order is complied with, and he can then appeal immediately from what would be an incontestably final decision within the meaning of section 1291. See, e.g., Clift v. United States, 597 F.2d 826, 828 (2d Cir.1979) (Friendly, J.); Familias Unidas v. Briscoe, 544 F.2d 182, 191 (5th Cir.1976); 15 Wright,...