United States v. Central Contracting Co., Inc., Civ. A. No. 81-0834-R.

• Citation: 537 F. Supp. 571
• Decision Date: 06 April 1982
• Docket Number: Civ. A. No. 81-0834-R.
• Parties: UNITED STATES of America v. CENTRAL CONTRACTING CO., INC.
• Court: United States District Courts. 4th Circuit. United States District Court (Eastern District of Virginia)

537 F. Supp. 571

UNITED STATES of America v. CENTRAL CONTRACTING CO., INC.

Civ. A. No. 81-0834-R.

United States District Court, E. D. Virginia, Richmond Division.

April 6, 1982.

COPYRIGHT MATERIAL OMITTED

Hays Gorey, Jr., U. S. Dept. of Justice, Washington, D. C., Raymond A. Carpenter, Asst. U. S. Atty., Richmond, Va., for plaintiff.

Thomas G. Slater, Jr., Ray V. Hartwell, III, Hunton & Williams, Richmond, Va., for defendant.

MEMORANDUM

WARRINER, District Judge.

On 19 February 1982, the government filed a motion for reconsideration and clarification of the order entered by this Court on 2 February 1982. See United States v. Central Contracting Co., Inc., 531 F.Supp. 133 (E.D.Va.1982). See also United States v. Central Contracting Co., Inc., 527 F.Supp. 1101 (E.D.Va.1981). Specifically, the government moves the Court to reconsider or clarify its position regarding the filing of "determinative" materials and documents, see 15 U.S.C. § 16(b), and its position regarding the necessity for and nature of any future publication that might be required of plaintiff or defendant. The Court will address each point in turn.

I

The government remains steadfast in its position that, "there were simply no documents or materials in this case that contributed materially to the formulation of the proposed relief. There is nothing to be disclosed." Pl.Br. at 7. Moreover, plaintiff argues that the language of the statute,¹ and policy dictate that this Court should not concern itself further with the matter once the United States has certified it considered no documents determinative, absent a showing of bad faith or malfeasance.²

Plaintiff recognizes that prior to the decisions in this case there has been no judicial construction of what is meant by the term "determinative" as used in the Act and suggests the literal definition of the word should apply in context with the legislative history of the Antitrust Procedures and Penalties Act. 15 U.S.C. § 16(b-h) (hereinafter "the Act"). The Court agrees. The dictionary definition of the adjective "determinative" is something "having power or tendency to determine" or "fixing or tending to determine the specific character." Webster's Third New International Dictionary (1971). To "determine" means "to come to a decision concerning a matter as the result of investigation or reasoning" or "to settle or decide by choice of alternatives or possibilities." The word can also mean "to establish causally: to bring about as a result" or "to set bounds or limits to": as "to fix the boundaries of" or "to limit in extent or scope." Id.

Plaintiff interprets this to mean that there must be a direct causal relationship between a decision by the Department of Justice and the documents or other materials that are to be considered determinative. There are numerous degrees of causality and plaintiff acknowledges that the level of causality necessary for a document to be considered determinative has not been judicially determined either. Plaintiff asserts, however, that the issue need not be decided in this case because: (1) no company documents or studies were submitted to plaintiff by the defendant in order to persuade plaintiff to accept any form of decree; (2) plaintiff received no special report or other advice recommending a particular remedy in this case; (3) none of the evidence accumulated during a grand jury investigation leading to a prior, related criminal conviction was considered "determinative" in formulating the proposed consent decree; and (4) the history of negotiations shows that defendant offered to submit to an injunction in the form of a similar decree entered against a co-defendant in a preceding criminal matter.

Plaintiff argues further that the legislative history of the Act supports a definition of "determinative" which excludes "evidentiary materials" obtained by the government in a given case. To support its position, and to demonstrate its concept of a determinative document, plaintiff provides an extended narrative and analysis of the events which led Congress to enact legislation that became the Act. The Act emerged in the wake of questions surrounding the "Dita Beard Memo" and three consent decrees entered into by the United States in antitrust suits against International Telephone & Telegraph Company (ITT).³ The three ITT cases were all filed by the Department of Justice in 1969 by Richard W. McLaren, Assistant Attorney General for the Antitrust Division. The suits challenged ITT's acquisition of the Hartford Fire Insurance Company (Hartford), Grinnell Corporation (Grinnell), and Canteen Corporation of America (Canteen), and sought divestiture. The three cases were settled in 1971 by consent decrees requiring divestiture of Grinnell, Canteen and two other companies, but permitting ITT to keep Hartford.

Concern arose the following year amidst allegations linking settlement of the ITT cases with a commitment of $400,000 by ITT to assist the City of San Diego in preparation for the upcoming Republican National Convention. Extensive congressional hearings established that ITT had engaged in an extensive lobbying campaign throughout the Nixon Administration in an effort to obtain relief from the antitrust litigation. The effort included meetings with Deputy Attorney General Richard G. Kleindeinst and McLaren which, in part, resulted in McLaren commissioning an independent study of the "Economic Consequences of a Hartford Divestiture by ITT" (hereinafter the "Ramsden Report"). Following receipt of the Ramsden Report, McLaren recommended to Kleindeinst, inter alia, that the need for a divestiture of Hartford was outweighed by a projected adverse effect on the stock market and the economy.⁴

Plaintiff asserts that the Ramsden Report and documents of like flavor are what Congress meant by a determinative document. The Ramsden Report had substantial impact on McLaren's thinking about the divestiture of Hartford and was pivotal in the decision by the Antitrust Division to accept a settlement substantially different from the relief the Division originally had sought.

II

The Court agrees that the Ramsden Report was a determinative document — in the phrase of the day it was a "smoking gun." In most cases, however, such a single document will not exist, rather a determination to proceed on a given course will be reached upon an aggregate of information. Such information in this day of "word processing" presumably is collected and communicated in document form. In turn, the aggregate of these documents and other materials leads the Justice Department to a conclusion that it should enter into a consent decree. And yet, by its own statistics, the Department of Justice states that out of the 188 cases that have settled by consent decree since the enactment of the Act, only 16 have involved "documents and other materials which the government considered determinative in formulating the relief." Pl.Br. at 6. If this be true, (and given the Justice Department's construction of the Act, the Court does not doubt its truth) then the directive in the Act is either superfluous, or it is being misinterpreted or subverted. The Court presumes that Congress did not intend legislation to be superfluous and the Court is satisfied that the Justice Department would not intentionally subvert the dictates of that body.

The government endeavors to justify the paucity of determinative documents by contrasting the ITT context, replete with its lurid allegations of subversion at the highest levels of government, with the relatively obscure parties and minor importance of the instant case. Plaintiff distinguishes ITT from the instant case on two grounds. First, ITT was a "big case" involving the application of antitrust theories in a novel area, whereas the instant matter is a relatively small-time bid-rigging and price-fixing case, involving established principles of law. Second, the ITT cases were significant civil cases unrelated to any prior criminal prosecution, whereas the instant matter was a "tag-along" civil case filed after a guilty plea in a criminal case. Plaintiff argues that these differences indicate the dangers Congress saw in the ITT situation but which are unlikely to occur here. Congress was simply not concerned with the sorts of documents and materials that accompany little cases like this. Pl.Br. at 18. The Court is aware of the differences between ITT and Central Contracting. The Court is also aware that Congress enacted a law whose basic purpose is to substitute the "sunshine" of disclosure from chummy dealings in every case. In so doing, Congress has mandated that the courts play a more active role in the consent decree process than was the previous practice.⁵

The need for scrutiny is important in any case, but judicial scrutiny is perhaps more important in a run-of-the-mill case on which public attention is not focused and where abuse may escape unnoticed than in a "big case" where public interest supplements the court's scrutiny. If the Court in this case doesn't scrutinize there will be no independent scrutiny.

III

Plaintiff suggests that it is not unusual for there to be no determinative documents even in the most complicated of cases. Cf., United States v. AT&T, Civ. No. 74-1698 (D.D.C.) (dismissal of monopolization suit against AT&T in which Justice Department has agreed to abide by provisions of the Act). That view, in the opinion of the Court, is based upon a misinterpretation of the Act. The Act clearly does not require a full airing of Justice Department files but the Court cannot countenance plaintiff's claim that though Congress enacted sunshine legislation the courts may blandly (and blindly) accept government certification in case after case that no documents or materials, by themselves or in the aggregate, led to a determination by the government that it should enter into a consent decree.

Plaintiff's brief and accompanying affidavit, rather than...