659 F. 2d 800 - State of Illinois Petition to Inspect and Copy Grand Jury Materials State of Illinois

At issue in this appeal is whether section 4F(b) of Title III of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (Hart-Scott-Rodino), 15 U.S.C. § 15f(b), authorizes the disclosure of grand jury materials to a state attorney general without the traditional showing of particularized need.1 The district court concluded that it does not, and accordingly refused to order disclosure to the Illinois Attorney General of any materials that had been gathered or generated in connection with a grand jury criminal investigation of numerous individuals and companies, who are now defendants in a class action lawsuit brought by the State of Illinois.2 We affirm.

* In December 1976, the Antitrust Division of the United States Department of Justice began a grand jury investigation concerning possible violations of the federal criminal laws by persons in the construction trades in Illinois. In June 1978, a grand jury indicted eighteen corporations, thirteen persons, and a labor union for conspiring to rig bids in public sheet metal projects in metropolitan Chicago, in violation of section 1 of the Sherman Act, 15 U.S.C. § 1, and the federal mail fraud statute, 18 U.S.C. § 1341. In January 1979, the grand jury indicted eighteen corporations and five persons for a bid-rigging conspiracy in piping construction projects in the Chicago area, also in violation of 15 U.S.C. § 1 and 18 U.S.C. § 1341. Forty-eight of the defendants entered pleas of nolo contendere and received fines and/or sentences. Four of the nine remaining defendants were convicted. All proceedings in the criminal cases have been terminated.

Several civil class actions were filed by the State of Illinois under sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15 and 26. The State's civil actions tracked the criminal indictments, naming as additional defendants numerous persons and certain companies previously identified as unindicted co-conspirators in the criminal actions.

Pursuant to section 4F(b) of Hart-Scott-Rodino, 15 U.S.C. § 15f(b), the Illinois Attorney General sought all relevant materials in the possession of the United States Attorney General. The Department of Justice provided the Illinois Attorney General with documents totaling fewer than twenty pages. All remaining materials, the Department of Justice represented, were grand jury materials which could not be released absent a court order. In January 1980, the State of Illinois petitioned the district court, pursuant to section 4F(b) and Rule 6(e), Fed.R.Crim.P., for production of all grand jury materials.3 The United States did not object to the disclosure of grand jury materials to the State of Illinois. Certain defendants in the civil suits and others intervened to oppose the State's petition.

In January 1981, the district court denied the Illinois Attorney General access to any of the requested grand jury materials. The district judge stated that the "investigative files and other materials" language of section 4F(b) did not refer to "material acquired by and belonging to the grand jury...." He also noted that section 4F(b) states that documents are to be released only "to the extent permitted by law" and that Fed.R.Crim.P. 6(e) determines the conditions under which disclosure of grand jury materials is permissible. Because the district judge found that the petitioners had failed to meet the particularized need standard required for disclosure under Rule 6(e), access to the grand jury materials was refused.

The Fourth and Ninth Circuits have considered whether section 4F(b) was intended to alter the standards for disclosure of grand jury materials under Fed.R.Crim.P. 6(e) and both have concluded that it was so intended. United States v. Colonial Chevrolet Corp., 629 F.2d 943 (4th Cir. 1980), cert. denied, 450 U.S. 913, 101 S.Ct. 1352, 67 L.Ed.2d 337 (1981); United States v. B. F. Goodrich Co., 619 F.2d 798 (9th Cir. 1980). For the reasons that follow, we respectfully disagree.4

The issue of disclosure of grand jury materials under section 4F(b) presents two questions of statutory construction: (1) whether grand jury materials are encompassed within the "investigative files or other materials" language of section 4F(b), and (2) assuming that they are, whether their disclosure is prohibited because section 4F(b) provides for disclosure only "to the extent permitted by law."

The Fourth Circuit concluded that the definition of "investigative files" included grand jury materials. Noting that the grand jury investigation is often "the most important part of the 'investigative file' in an antitrust proceeding," and that the assistance Congress intended to provide "would frequently be negligible" if grand jury materials were excluded, the court held that grand jury transcripts in the possession of the Department of Justice were "investigative files and other materials" as used in the statute. 629 F.2d at 947. The Ninth Circuit also decided that "investigative files and other materials" included grand jury materials, but it did not specify any reasons for that conclusion.

We doubt that Congress was thinking of grand jury materials when it statutorily required the United States Attorney General to make available upon request "investigative files and other materials." Beginning as we must with the statutory language itself, we note that grand jury materials are never mentioned. Moreover, the law does not permit the Department of Justice to release grand jury materials to a state attorney general "upon request" although literally that is what the petitioner's interpretation of the statute prescribes. The parties agree that a court order is required for disclosure of grand jury materials. As the Supreme Court stated in Pittsburgh Plate Glass Co. v. United States, 360 U.S. 395, 398, 79 S.Ct. 1237, 1240, 3 L.Ed.2d 1323 (1959):Any disclosure of grand jury minutes is covered by Fed.Rules Crim.Proc. 6(e) promulgated by this Court in 1946 after approval of Congress. In fact, the federal trial courts as well as the Courts of Appeals have been nearly unanimous in regarding disclosure as committed to the discretion of the trial judge. Our cases announce the same principle, and Rule 6(e) is but declaratory of it. (footnotes omitted)

Thus, while the grand jury has independence in many areas, it remains for certain purposes an appendage of the court. United States v. Campanale, 518 F.2d 352 (9th Cir. 1975); United States v. Stevens, 510 F.2d 1101 (5th Cir. 1975). Petitioner, citing In re Grand Jury Proceedings, 525 F.2d 151, 157 (3d Cir. 1975), asserts that the courts are without power to stay the grand jury's proceedings or to set limits on the scope of its inquiry. That proposition, whatever its worth, is irrelevant to the issue of disclosure. Had Congress intended to make a change in the law of grand jury disclosure, we would expect a provision directed to the district courts instead of to the Attorney General of the United States because it is the courts that have exclusive authority under Rule 6(e) to order disclosure of grand jury materials.5

We are sympathetic to the State's assertion that there exists little in the way of "investigative files and other materials" to obtain if grand jury materials are not included. Neither the State nor the United States has cited any evidence, however, that Congress knew there was little investigative material extrinsic to grand jury proceedings in antitrust investigations conducted by the Department of Justice.6 (At oral argument we learned for the first time that antitrust investigations are from the outset conducted almost entirely before the grand jury. Prior to oral argument, we had assumed that there was far more pre-grand jury investigation. We make note of this fact in no way to criticize the Justice Department's methods but simply to indicate that widespread knowledge of that practice cannot be assumed.)

The policy in favor of grand jury secrecy is "older than our Nation itself." Pittsburgh Plate Glass, 360 U.S. at 399, 79 S.Ct. at 1240.7 Therefore we find it difficult to believe that Congress without a word of discussion intended a general phrase like "investigative files and other materials" to include grand jury materials.8B.

Our holding does not rest on the "investigative files and other materials" language because section 4F(b) contains a clear indication that Congress did not intend to make new law concerning disclosure of grand jury materials to state attorneys general. Section 4F(b) provides that investigative files and other materials are to be made available "to the extent permitted by law." 15 U.S.C. § 15f(b). "(T)he starting point for interpreting a statute is the language of the statute itself. Absent a clearly expressed legislative intent to the contrary, that language must ordinarily be viewed as conclusive." Consumer Product Safety Commission v. GTE Sylvania, 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980).

The law of grand jury disclosure is set out in Fed.R.Crim.P. 6(e) which provides inter alia :

(2) General Rule of Secrecy. (A)n attorney for the government ... shall not disclose matters occurring before the grand jury, except as otherwise provided for in these rules.

(3) Exceptions.

(C) Disclosure otherwise prohibited by this rule of matters occurring before the grand jury may also be made

(i) when so directed by a court preliminarily to or in connection with a judicial proceeding; ....

Rule 6(e)(3)(C)(i) does not set forth the standards for determining when release should be made. As consistently interpreted by the Supreme Court, however, Rule 6(e)(3)(C)(i) specifically prohibits the disclosure of grand jury materials except upon a showing of "particularized need." Douglas Oil Co. v. Petrol Stops Northwest, 441 U.S. 211, 222, 99 S.Ct. 1667, 1674, 60 L.Ed.2d 156 (1979); Dennis v. United States, 384 U.S. 855, 872, 86 S.Ct. 1840, 1850, 16 L.Ed.2d 973 (1966); Pittsburgh Plate Glass Co. v. United States, 360 U.S. 395, 400, 79 S.Ct. 1237, 1241, 3 L.Ed.2d 1323 (1959); United States v. Procter & Gamble Co., 356 U.S. 677, 683, 78 S.Ct. 983, 986, 2 L.Ed.2d 1077 (1958).

The Fourth and Ninth Circuits ruled that under section 4F(b), state attorneys general are relieved of the requirement of establishing a particularized need in order to obtain disclosure. Colonial, 629 F.2d at 950 (4th Cir.); B. F. Goodrich, 619 F.2d at 801 (9th Cir.).9 The primary basis for those decisions, and for the position urged by the State and the United States here, is that Congress explicitly recognized in Hart-Scott-Rodino "the important place State attorneys general occupy in Congress's scheme for antitrust enforcement." B. F. Goodrich, 619 F.2d at 801. Moreover, the State attempts to distinguish the Supreme Court cases in which the particularized need standard was articulated on the basis that there disclosure was sought by private parties rather than by a state official. Douglas Oil, Dennis, Proctor & Gamble. In section 4F(b), the State asserts, Congress resolved the balance between the need for disclosure and interest in grand jury secrecy in favor of disclosure without a particularized need.

We do not agree with the State's contention. Section 4F(b) requires on its face that files be made available only "to the extent permitted by law." It is clear that at the time the rule was enacted, the relevant law included both Rule 6(e) and the Supreme Court decisions requiring a particularized need. Dennis v. United States; Pittsburgh Plate Glass Co. v. United States; United States v. Procter & Gamble Co.10 The State argues that Congress intended district courts faced with a section 4F(b) request to comply with the language but not the Supreme Court's interpretation of Rule 6(e)(3)(C)(i). In short, the State suggests that Congress intended disclosure to be made only when "directed by a court ... in connection with a judicial proceeding," Rule 6(e) (3)(C)(i), but at the same time meant to dispense with the showing of "particularized need" required by the Supreme Court. Pittsburgh Plate Glass, 360 U.S. at 400, 79 S.Ct. at 1241; Procter & Gamble, 365 U.S. at 683, 78 S.Ct. at 986. The problem with that reasoning is that, as Congress well knew, a Supreme Court decision is as much the "law" as is a judicial procedural rule approved by Congress and promulgated by the Supreme Court.

The State here, like the Fourth Circuit in Colonial, attempts to distinguish the Supreme Court's decisions by pointing out that the Court has never held that a particularized need is required when a state official is seeking disclosure of grand jury materials. Thus, it is argued, dispensing with the particularized need requirement when a state attorney general requests disclosure under section 4F(b) is not actually prohibited by existing law. That argument must fail for two reasons. First, this circuit has considered whether to release grand jury materials to a state attorney general, and we refused to permit disclosure precisely because there was a failure to show a compelling and particularized need. In re Holovachka, 317 F.2d 834 (7th Cir. 1963). The petitioner refers us to In re Special February 1971 Grand Jury v. Conlisk, 490 F.2d 894 (7th Cir. 1973), in which disclosure of grand jury materials to a Chicago police board was permitted. Conlisk does not support the petitioner's argument, however, because there we applied the particularized need standard. 490 F.2d at 897. The other cases cited for the proposition that existing law permits disclosure on a lesser showing are inapposite.11

Second, the issue in this case is not whether disclosure on less than particularized need could ever be ordered by a court consistent with existing law, but whether section 4F(b) is "a Congressional directive to the courts that grand jury materials should be disclosed to state attorneys general, without a showing of particularized need...." (Reply brief of the State.) The phrase "to the extent permitted by law" certainly does not indicate that Congress intended to make important new law in the area of disclosure of grand jury material; instead it connotes the existing law.12 We are certain that if Congress intended to create the change that the petitioner suggests, it would have said so. It is simply impossible to believe that the " 'indispensable secrecy of grand jury proceedings,' " Procter & Gamble, 356 U.S. at 682, 78 S.Ct. 983, 985, 2 L.Ed.2d 1077 (citation omitted), would have been altered by Congress sub silentio.

Any lingering doubt as to whether disclosure of grand jury materials was contemplated by Congress is dispelled by the only reference to grand jury materials in the legislative history of section 4F(b). To Senator Roman Hruska's objection to section 4F(b) on the basis that it could turn the Department of Justice into a "massive document distribution center," 122 Cong.Rec. 29144 (1976), Senator James Abourezk, Senator Floor Manager for the bill, replied:

The section specifically limits the Attorney General's power to release documents to whatever his powers are under existing law. Under existing law, he cannot turn over materials given in response to a grand jury demand or to a civil investigative demand.

122 Cong.Rec. 29160 (1976) (emphasis added).13 A statement by one of the sponsors of the legislation "deserves to be accorded substantial weight in interpreting the statute." FEA v. Algonquin SNG, Inc., 426 U.S. 548, 564, 96 S.Ct. 2295, 2304, 49 L.Ed.2d 49 (1976); accord, National Woodwork Mfrs. Ass'n v. NLRB, 386 U.S. 612, 87 S.Ct. 1250, 18 L.Ed.2d 357 (1967); see also Browder v. Tipton, 630 F.2d 1149, 1151-52 (6th Cir. 1980) (holding that a statement by the Manager of a bill is entitled to "great weight").

The only other relevant legislative history is a House Report on an earlier version of section 4F(b) which explained that Justice Department files were to be made available "to the State attorneys general 'to the extent permitted by law.' This means that the files are to be made available except where specifically prohibited." H.R.No.94-499, 94th Cong., 2d Sess. 17 (1975), reprinted in (1976) U.S.Code Cong. & Ad.News, at 2586-87. That statement is completely consistent with Senator Abourezk's remarks, because existing law does prohibit the release of grand jury materials unless there is a showing of particularized need.14

Finally, it is argued that the purpose of Hart-Scott-Rodino mandates a conclusion that Congress "relieved (a state attorney general) of the requirement of establishing a 'particularized need' as a threshold condition to disclosure." Colonial, 629 F.2d at 950 (4th Cir. 1980). The Ninth Circuit noted that "Title III of the Hart-Scott-Rodino Antitrust Improvements Act was intended to create effective state antitrust enforcement and places the State attorneys general on a different footing than private parties seeking redress for antitrust violations." B. F. Goodrich, 619 F.2d at 800-01. The State contends that the "different footing" afforded state attorneys general demonstrates that Congress intended to waive the particularized need requirement for disclosure of grand jury material. We cannot agree that because Congress intended to enhance the role of state attorneys general in antitrust law enforcement, section 4F(b) must be interpreted to alter the standard for disclosure of grand jury materials. In In re Grand Jury Investigation of Cuisinarts, Inc., 516 F.Supp. 1008 (D.Conn.1981), the district judge explained in detail why although a state attorney general is placed on a new footing vis-a-vis parens patriae actions, the conclusion reached by the Fourth and Ninth Circuits is incorrect. Because we agree with his analysis, we quote from that opinion at some length here:

Having reviewed the legislative history of Hart-Scott-Rodino, the court concludes that, as a general matter, the statute sweeps less broadly, and thus elevates the state role in antitrust enforcement to a lesser extent, than the petitioners assert. By authorizing states to bring civil antitrust actions, as parens patriae, Hart-Scott-Rodino does create a place for state governments in the enforcement of federal antitrust laws. Those parens patriae actions were intended, however, to fill only a narrow gap in the prior scheme of enforcement. The draftsmen of Hart-Scott-Rodino noted two technical problems which limited the usefulness, and thus deterred the filing, of private consumer class actions. The first problem was the difficulty, under Rule 23, Fed.R.Civ.P., of gaining class certification, see (H.R.Rep.No.499, 94th Cong., 2d Sess. 6-8, reprinted in ) (1976) U.S.Code Cong. & Ad.News 2576-2577; the second was the difficulty of "managing" such an action, once a class has been certified, id. at 2583-2584. (footnote omitted.) Hart-Scott-Rodino attempts to solve both problems.

The concept of a parens patriae suit had long been known at common law. In the United States, it had evolved into a means by which a state could "sue in its quasi-sovereign capacity on behalf of its citizens to prevent interference with the flow of goods or natural resources" into the state or "to prevent acts of pollution." Kintner, Griffin & Goldston, The Hart-Scott-Rodino Antitrust Improvements Act of 1976: An Analysis ("Hart-Scott-Rodino: An Analysis"), 46 Geo.Wash.L.Rev. 1, 18-19 (1977). Although the parens patriae action was recognized to be the most efficient means of overcoming the obstacles to private class actions, judicial decisions in the early 1970's had limited the ability of states to bring such suits to remedy antitrust violations. Hart-Scott-Rodino: An Analysis 19; see Hawaii v. Standard Oil Co., 405 U.S. 251, 92 S.Ct. 885, 31 L.Ed.2d 184 (1972); California v. Frito-Lay, Inc., 474 F.2d 774 (9th Cir.), cert. denied, 412 U.S. 908, 93 S.Ct. 2291, 36 L.Ed.2d 974 (1973). Reacting to these decisions, see (H.R.Rep.No.499, 94th Cong., 2d Sess. 7-9, reprinted in ) (1976) U.S.Code Cong. & Ad.News 2577-2578, Congress, in Hart-Scott-Rodino, authorized the states to proceed as parens patriae in antitrust cases. (The House Report noted that the provision permitting parens patriae actions by state attorneys general was "the heart" of the bill. H.R.Rep.No.499, 94th Cong., 2d Sess. 9 (1975), reprinted in (1976) U.S.Code Cong. & Ad.News at 2578.) Congress solved the problem created by Rule 23, Fed.R.Civ.P., simply by making clear that class certification would not be required in parens patriae actions, see 15 U.S.C. § 15c(a). It solved the chief problem in managing such actions by permitting damages to be computed through aggregation techniques, see 15 U.S.C. § 15d.

Discovery problems were not of apparent concern to the draftsmen of the parens patriae provisions. With respect to discovery issues, the draftsmen noted only that the individual consumer lacked the investigative resources to disclose a possible conspiracy in violation of the antitrust laws. See (H.R.Rep.No.499, 94th Cong., 2d Sess. 6-7, reprinted in ) (1976) U.S.Code Cong. & Ad.News 2575-2576. The draftsmen clearly recognized that either a class action or a parens patriae action could solve this problem by putting the resources of the class or the state government to work in discovery. Thus the only apparent concern of the draftsmen with respect to discovery was that of overcoming the individual litigant's lack of financial resources. Significantly, the reports of the relevant Congressional committees never mention as a problem in antitrust enforcement any substantive limitations on discovery imposed by the Federal Rules of Civil Procedure or the Federal Rules of Criminal Procedure.

Thus Hart-Scott-Rodino is but "a limited legislative response to (a) perceived loophole in antitrust liability." Hart-Scott-Rodino: An Analysis 19-20 (emphasis supplied). It provides specific, carefully tailored solutions to technical problems of antitrust enforcement. There is no indication that its draftsmen ever regarded the existing rules of procedure concerning discovery as a problem in such enforcement, or that they intended to modify, no less contravene, the existing rules.

In re Grand Jury Investigation of Cuisinarts, Inc., 516 F.Supp. 1008 (D.Conn.1981).

The State contends that if Congress did not intend to relieve state attorneys general of the particularized need requirement, section 4F(b) does no more than codify what was already often the informal practice of the United States Attorney General to make his files available to state attorneys general. Even if section 4F(b) does not increase the amount of material exchanged, a requirement that the Department of Justice make available all relevant or potentially relevant material within its legal authority to disclose is not insignificant. That the provision would be more powerful were grand jury materials included and the particularized need requirement waived is beside the point. There is nothing in the language of the statute or its legislative history to lead us to the conclusion the State advocates. Instead of purporting to make new law concerning grand jury disclosure, the statute states that the investigative files and other materials shall be made available only "to the extent permitted by law." (emphasis added) The legislative history contains a strong indication that section 4F(b) was not to alter existing law concerning disclosure of grand jury materials. We therefore conclude that section 4F(b) does not relieve the Illinois Attorney General of the obligation to show particularized need in order to obtain disclosure here.

The judgment of the district court is affirmed.

I respectfully dissent. The major purpose or goal of § 4F(b) is to put the several states more readily into the antitrust business by lending them the federal investigative work product regarding antitrust violations.1 It is arguable whether congressional intent to open the grand jury's investigative record to a requesting and proper state is directly stated in the legislation. Nevertheless such congressional intent is readily implied.2

The secrecy of the grand jury proceedings so reverently kept may be adequately preserved by an appropriate protective order of the District Court granting the release of any of the grand jury's record.

I am persuaded by the interpretation of the legislation in United States v. Colonial Chevrolet Corp., 629 F.2d 943 (4th Cir. 1980), cert. denied, 450 U.S. 913, 101 S.Ct. 1352, 67 L.Ed.2d 337 (1981), and United States v. B. F. Goodrich Co., 619 F.2d 798 (9th Cir. 1980), notwithstanding the majority's view to the contrary. In order to resolve the conflict between the circuits which has now arisen, I would urge Congress to enact appropriate legislation clearly setting forth its intention in the premises.