U.S. v. Colonial Chevrolet Corp.
| Decision Date | 12 August 1980 |
| Docket Number | 79-5238,Nos. 79-5237,s. 79-5237 |
| Parties | 1980-2 Trade Cases 63,473 UNITED STATES of America, Commonwealth of Virginia, Plaintiff, Appellant, v. COLONIAL CHEVROLET CORPORATION, Hoff Cadillac Incorporated, Phillips Oldsmobile, Incorporated, Phillips Mercury-Lincoln, Incorporated, Kimnach Ford, Incorporated, Cavalier Ford, Incorporated, Atlantic AMC/Jeep, Incorporated, Tidewater Automobile Dealers Association, and several unnamed individuals and corporations, Appellees. UNITED STATES of America, Commonwealth of Virginia, Appellant, Plaintiff, v. COLONIAL CHEVROLET CORPORATION, Hoff Cadillac Incorporated, Phillips Oldsmobile, Incorporated, Phillips Mercury-Lincoln, Incorporated, Kimnach Ford, Incorporated, Cavalier Ford, Incorporated, Atlantic AMC/Jeep, Incorporated, Tidewater Automobile Dealers Association, and several unnamed individuals and corporations, Appellees. |
| Court | U.S. Court of Appeals — Fourth Circuit |
John B. Russell, Jr., Asst. Atty. Gen., Richmond, Va. (Marshall Coleman, Atty. Gen., Richmond, Va., Joseph W. Kaestner, Asst. Atty. Gen., Antitrust Unit on brief, Richmond), for appellant Commonwealth of Virginia.
Peter L. De La Cruz, Dept. of Justice, Washington, D. C. (James R. Weiss, John H. Shenefield, Asst. Atty. Gen., Barry Grossman, Dept. of Justice, Washington, D. C., on brief), for appellant United States of America.
David F. Peters, Richmond, Va. (Joseph M. Spivey, III, Priscilla A. Burbank, Hunton & Williams, Richmond, Va., on brief), for Tidewater Automobile Dealers Association.
Joseph L. Lyle, Jr., Pickett, Spain & Lyle, Virginia Beach, Va., on brief, for Hoff Cadillac, Inc.
Guilford D. Ware, Crenshaw, Ware & Johnson, Norfolk, Va., on brief, for Cavalier Ford, Inc.
Hunter W. Sims, Jr., Canoles, Mastracco, Martone, Barr & Russell, Norfolk, Va., on brief, for Phillips Mercury-Lincoln, Inc.
William R. O'Brien, Brydges, Hudgins, Ege, Burt & O'Brien, Virginia Beach, Va., on brief, for Kimnach Ford, Inc.
Guy R. Friddell, III, Norfolk, Va. (Richard B. Spindle, III, Thomas G. Johnson, Jr., Willcox, Savage, Lawrence, Dickson & Spindle, P. C., Norfolk, Va., on brief), for Certain Unindicted Individuals and Corporations.
Robert Abrams, Atty. Gen. of N. Y., Shirley Adelson Siegel, Sol. Gen., John M. Desiderio, Asst. Atty. Gen., Chief, Anti-Monopolies Bureau; Michael J. Landron, Deputy Asst. Atty. Gen., New York City, on brief, for the State of New York as amicus curiae.
Stephen H. Sachs, Atty. Gen., George A. Nilson, Deputy Atty. Gen., Charles O. Monk, II, Asst. Atty. Gen. and Chief, Antitrust Division, Timothy J. Shearer, Asst. Atty. Gen., Baltimore, Md., on brief, for the State of Maryland as amicus curiae.
Before WINTER, RUSSELL and SPROUSE, Circuit Judges.
This is an appeal from a denial of a petition for disclosure of grand jury materials in a concluded successful antitrust prosecution, as sought by the State Attorney General of Virginia, and the Attorney General of the United States, under the provisions of Section 15f(b), 15 U.S.C. We reverse.
To a federal antitrust indictment, charging the appellee Tidewater (Virginia) Automobile Dealers Association, along with certain members of that Association (also appellees in this proceeding) with engaging in a price-fixing conspiracy in connection with charges for auto body repairs, the defendants-appellees plead nolo contendere. The district court accepted the plea. Under the terms of Title III of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which was "expressly adopted to create 'an effective mechanism to permit consumers to recover damages for conduct which is prohibited by the Sherman Act, by giving State attorneys general a cause of action (to sue as parens patriae on behalf of the States' citizens) against antitrust violators,' " 1 the Attorney General of the United States is required "(w)henever (he) has brought an action under the antitrust laws, and he has reason to believe that any State attorney general would be entitled to bring an action (under this parens patriae authority) based substantially on the same alleged violation of the antitrust laws" to "promptly give written notification thereof to such State attorney general." 2 Obedient to this statute the Attorney General of the United States notified the Virginia Attorney General of the successful prosecution of the appellees for a violation of the Sherman Act.
This same Title of the Act further provided that in order "(t)o assist a State attorney general in evaluating the notice (of the federal antitrust action) or in bringing any (parens patriae ) action . . . the Attorney General of the United States shall, upon request of such State attorney general, make available to him, to the extent permitted by law, any investigative files or other materials which are or may be relevant or material to the actual or potential cause of action . . . ." 3 The Attorney General of Virginia requested the Attorney General of the United States under this authorization to make available to him "all grand jury materials in the files of the United States Department of Justice which relate to the investigation of possible antitrust violations by automobile body shops in the Tidewater area (of) Virginia" and for access to the bills of particulars filed by the United States in the Sherman Act prosecution. In connection with this request, the Attorney General of Virginia, joined by the Attorney General of the United States, moved the district court, which had had jurisdiction over the federal criminal prosecution herein, for disclosure, subject to appropriate protective clauses, of "all grand jury materials in the files of the United States Department of Justice which relate to the investigation of possible antitrust violations . . . involved in United States v. Colonial Chevrolet Corp., et al., Crim.No. 78-0016N," and for "access to the bill of particulars . . . currently under seal by Order of this Court." Notice of this motion was given the appellees. They entered objections to the motion. After a hearing on the motion, the district court denied the motion; the Attorney General of the United States and the Attorney General of Virginia have appealed.
The point at issue on the motion was the right of the Attorney General to disclose to the Attorney General of Virginia, under the terms of the Hart-Scott-Rodino Act, all the grand jury materials, including the transcript of testimony and the bill of particulars in his possession in connection with or related to the federal antitrust prosecution of the appellees. In denying disclosure the district court held that grand jury transcripts are not "investigative files" within the meaning of that term in the Act and are not, therefore, embraced within the Attorney General's statutory right to disclose but that, if they are "investigative files" under the Act, their disclosure by the Attorney General is allowed only "to the extent permitted by law," i. e., as permitted by Rule 6(e), Fed.R.Crim.P., which, under the decisions applying such Rule, requires a showing of "particularized need" by the party seeking disclosure. It also found that a "particularized need" would not comprehend assisting in actual or potential civil antitrust litigation. Since the purpose of the State Attorney General in seeking disclosure was for the purpose of assisting in potential antitrust litigation, the petitioner Attorney General of Virginia had not shown the necessary "particularized need" required for disclosure, and the application for disclosure was denied.
Though not set forth in this sequence in its opinion, the reasoning by which the district court justified denial of disclosure begins logically with its conclusion that "investigative files," as that term is used in the statute, does not embrace grand jury proceedings. 4 We, however, do not agree with this narrow definition of the term "investigative files." In our opinion this construction of the term in the statute is plainly contrary to the legislative purposes of the statute involved. In Title III of the Act the Congress was manifestly seeking to encourage parens patriae suits by State attorneys general in order to "assist" in the public enforcement of the antitrust laws for the benefit of small consumers. To this end it sought to make available for the use of the State Attorney General, to the full extent permitted by law, all the materials developed in the federal investigation of the alleged antitrust violation. The use of grand jury proceedings as an "investigative" instrument in antitrust enforcement is well recognized. 5 Often the grand jury investigation is the most important part of the "investigative file" in an antitrust proceeding. 6 The assistance which Congress sought to provide by this statute for State attorneys general in maintaining parens patriae antitrust suits would frequently be negligible if the grand jury materials were to be excluded from the "investigative files and materials" which the Attorney General of the United States was authorized to make available to a State attorney general. It is unlikely in the extreme that Congress intended to exclude such materials from the statutory definition of investigative files. We are satisfied that grand jury transcripts in the possession of the Department of Justice fall clearly within the term "investigative files and materials," as used in the statute. And this is the conclusion reached by the only other United States Court of Appeals which has confronted this issue. 7
We are mindful that Senator Abourezk, who was handling on the floor the 1976 Act for the Judiciary Committee, did during the final Senate debate on the Act state in reference to the specific provision of the Act with which we are concerned:
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