United States v. Consolidated Laundries Corporation

• Court: United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
• Writing for the Court: Jacob Landau, and Charles Schinitsky, New York City, for Consolidated Laundries Corp
• Citation: 159 F. Supp. 860
• Parties: UNITED STATES of America v. CONSOLIDATED LAUNDRIES CORPORATION; Cascade Linen Supply Corp. of New Jersey; Central Coat, Apron & Linen Service, Inc.; General Linen Supply & Laundry Co., Inc.; Modern Silver Linen Supply Co., Inc. (a New York corporation); Modern Silver Linen Supply Co., Inc. (a New Jersey corporation); Standard Coat, Apron & Linen Service, Inc. (a New York corporation); Standard Coat, Apron & Linen Service, Inc. (a New Jersey corporation); Linen Supply Institute of Greater New York, Inc.; Linen Service Council of New Jersey; Louis Gordon; Harry Kessler; Charles Maslow; Jack Orlinsky; Fred S. Radnitz and Sam Spatt.
• Decision Date: 10 March 1958

159 F. Supp. 860

UNITED STATES of America v. CONSOLIDATED LAUNDRIES CORPORATION; Cascade Linen Supply Corp. of New Jersey; Central Coat, Apron & Linen Service, Inc.; General Linen Supply & Laundry Co., Inc.; Modern Silver Linen Supply Co., Inc. (a New York corporation); Modern Silver Linen Supply Co., Inc. (a New Jersey corporation); Standard Coat, Apron & Linen Service, Inc. (a New York corporation); Standard Coat, Apron & Linen Service, Inc. (a New Jersey corporation); Linen Supply Institute of Greater New York, Inc.; Linen Service Council of New Jersey; Louis Gordon; Harry Kessler; Charles Maslow; Jack Orlinsky; Fred S. Radnitz and Sam Spatt.

United States District Court S. D. New York.

March 10, 1958.

Richard B. O'Donnell, John D. Swartz, Richard Owen, Morris F. Klein, Bernard Wehrman, Paul D. Sapienza, New York City, and Ronald S. Daniells, Attys., Dept. of Justice, for the United States.

Jacob Landau, and Charles Schinitsky, New York City, for Consolidated Laundries Corp.

Edward J. O'Mara, Jersey City, N. J., (James A. Hession, Jersey City, N. J., and Benjamin Levine, New York City, of counsel), for Cascade Linen Supply Corp. of N. J.

Bauman, Epstein & Horowitz, New York City (Arnold Bauman and W. A. Newcomb, New York City, of counsel), for Central Coat, Apron & Linen Service, Inc. and Sam Spatt.

Cahill, Gordon, Reindel & Ohl, New York City (John F. Sonnett and Asa Sokolow, New York City, of counsel), for General Linen Supply & Laundry Co., Inc. and Fred S. Radnitz.

Halperin, Natanson, Shivitz, Scholer & Steingut, New York City (Harry J. Halperin, Samuel L. Scholer, and Theodore P. Halperin, New York City, of counsel), for Modern Silver Linen Supply Co., Inc. (a New York Corporation); Modern Silver Linen Supply Co., Inc. (a New Jersey Corporation); and Louis Gordon.

Laporte & Meyers, New York City (Ernest S. Meyers and Jules E. Yarnell, New York City, of counsel), for Standard Coat, Apron & Linen Service, Inc., (a New York Corporation); and Charles Maslow.

Edward J. O'Mara, Jersey City, N. J. (James A. Hession, Jersey City, N. J., of counsel), for Standard Coat, Apron & Linen Service, Inc., (a New Jersey Corporation); Linen Service Council of New Jersey; and Jack Orlinsky.

Myron P. Gordon, and Chester E. Kleinberg, New York City, for Linen Supply Institute of Greater New York, Inc., and Harry Kessler.

Mervin C. Pollak, and Norman M. Sheresky, New York City, of counsel for all defendants.

PALMIERI, District Judge.

This is a long and complex criminal anti-trust case in which the indictment is based upon alleged violations of the Sherman Anti-Trust Act, 26 Stat. 209 (1890), as amended, 15 U.S.C. §§ 1 and 2 (Supp. V). It is being tried before me without a jury.¹ I have considered it necessary to file this opinion because of repeated motions by defense counsel for full disclosure to them of Grand Jury testimony² of witnesses called by the Government, without prior scrutiny of the Grand Jury transcript by the Court.

I have declined to permit such disclosure, adhering in each instance to the rule of this Circuit as set forth in United States v. H. J. K. Theatre Corp., 2 Cir., 1956, 236 F.2d 502, certiorari denied sub nom. Rosenblum v. United States, 1957, 352 U.S. 969, 77 S.Ct. 359, 1 L.Ed.2d 323 and United States v. Alper, 2 Cir., 1946, 156 F.2d 222, which requires disclosure only of inconsistent statements after scrutiny of the Grand Jury testimony in camera by the Court.³ Defense counsel have opposed such scrutiny by me although I have repeatedly offered to make it.⁴ They have asserted their right to full and untrammelled disclosure at the conclusion of the witnesses' direct testimony, and nothing less.⁵ They assert that this right is theirs under the Supreme Court's decision in Jencks v. United States, 1957, 353 U.S. 657, 77 S. Ct. 1007, 1 L.Ed.2d 1103.

It is my view that such disclosure should not be granted in regard to Grand Jury minutes; that the scope of the Jencks decision does not extend to Grand Jury minutes; that the defendants are entitled only to the disclosure of inconsistent statements made before the Grand Jury; and that the Court must determine whether this inconsistency exists.

The right of defense counsel to inspect the Grand Jury testimony of a witness was not in issue in the Jencks case. The statements involved in that case were statements made before trial to agents of the Federal Bureau of Investigation. No questions were raised involving Grand Jury testimony nor was the matter discussed in the opinion of the Supreme Court.⁶ The Jencks decision, essentially, is a re-examination and clarification of two procedural matters which arise in connection with the availability to the defense, for cross-examination purposes, of documents in the possession of the Government. The first of these is the requirement imposed by some courts that the defense preliminarily show that the documents contain statements inconsistent with the witnesses' testimony at the trial. The second is the practice of having the Court determine whether the documents are relevant and material to the cross-examination. The Jencks decision disapproves of both these practices.

In dealing with the latter practice, the Supreme Court cited and disapproved five cases decided by the Court of Appeals for the Second Circuit.⁷ Two of them (Ebeling and Krulewitch) related solely to statements made by witnesses to the Federal Bureau of Investigation; two of them (Grayson and Beekman) related to records of the Securities and Exchange Commission and Office of Price Administration, respectively; while the fifth case (Cohen) concerned a demand for both testimony of a witness before a Federal Grand Jury and written statements given to the prosecutor, although it appears that the Circuit Court ruled only on the statements. If, the defense argument runs, the Jencks decision is meaningful as an expression of a rule of fairness in the administration of criminal justice in the federal courts, the Supreme Court must not be understood to have made one rule for prior statements made to Government agents and another rule for prior Grand Jury testimony. Thus, they contend, the path has been prepared for the untrammelled disclosure, which they seek, of all prior Grand Jury testimony. The argument is alluring. But I feel constrained to reject it.

In the absence of a clear and unequivocal statement to that effect, I cannot believe the Supreme Court intended its holding to apply to prior Grand Jury testimony. The inclusion of the Cohen case among the five Second Circuit decisions cited and disapproved is not, in my opinion, sufficient to attribute to the opinion in the Jencks case a meaning nowhere expressed. My belief that the Jencks decision was not intended to bear on disclosure of Grand Jury minutes is reinforced by the fact that the Court did not cite such Second Circuit cases as United States v. H. J. K. Theatre Corp., supra, and United States v. Alper, supra, when it expressed its disapproval of the practice of having the trial judge determine whether the document was relevant for cross-examination purposes. These cases dealt with Grand Jury minutes and it is reasonable to assume that, if the Court intended its ruling to apply to such minutes, it would have referred to these cases.

The Supreme Court, in Jencks, disapproved the requirement that a showing of inconsistency be made before the documents are turned over to the defense. It stated that the Fifth Circuit's reliance on Gordon v. United States, 1953, 344 U.S. 414, 73 S.Ct. 369, 97 L.Ed. 447 for that proposition was "misplaced," and that the Gordon opinion had been "misinterpreted." 353 U.S. 657, 666, 77 S.Ct. 1007, 1012. Turning to the Gordon opinion, then, it should be noted that that case dealt with the question of turning over to the defense prior statements of a witness made to the Government. Grand Jury minutes were not involved. In setting forth the problem which was before it in Gordon, the Court, at 344 U.S. 414, 418, 73 S.Ct. 369, 372, said:

"Apparently, earlier common law did not permit the accused to require production of such documents. Some state jurisdictions still recognize no comprehensive right to see documents in the hands of the prosecution merely because they might aid in the preparation or presentation of the defense. We need not consider such broad doctrines in order to resolve this case, which deals with a limited and definite category of documents to which the holdings of this opinion are likewise confined." (Footnotes omitted and emphasis added.)

What it comes down to, then, is this: The Supreme Court, in Jencks, handed down a decision which did not deal with Grand Jury minutes. The Jencks decision interpreted and explained a prior Supreme Court decision (Gordon) which was explicitly limited to statements made to Government investigators. The Jencks decision also disapproved a certain practice prevalent in this Circuit and, in connection with this disapproval, cases were cited dealing with non-Grand Jury documents while the cases which did deal with Grand Jury minutes were not cited.⁸ From this, defendants would have me conclude that the Supreme Court, in Jencks, established a rule of procedure to be followed in dealing with Grand Jury minutes.

An examination of other Supreme Court decisions indicates, however, that Grand Jury minutes are not to be dealt with in the same manner as other documents. The Supreme Court has, in the last twenty years, considered the extent to which Grand Jury minutes must be divulged by the Government. This was done in United States v. Socony-Vacuum Oil Co., 1940, 310 U.S. 150, 231-237, 60 S.Ct. 811, 84 L.Ed. 1129; and United States v. Johnson, 1943, 319 U.S. 503, 512-513, 63 S.Ct. 1233, 87 L.Ed. 1546.

In the Socony-Vacuum case, the Government and trial judge had used Grand Jury minutes to refresh the recollection of certain witnesses. The trial judge had refused to permit inspection of the minutes by defense co...