Advance Publications, Inc. v. United States

805 F.2d 155
CourtCourt of Appeals for the Sixth Circuit
DecidedNovember 3, 1986
DocketNos. 85-4053, 85-4068
StatusPublished
Cited by2 cases

This text of 805 F.2d 155 (Advance Publications, Inc. v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Advance Publications, Inc. v. United States, 805 F.2d 155 (6th Cir. 1986).

Opinion

NATHANIEL R. JONES, Circuit Judge.

This appeal arises from a grand jury investigation into possible antitrust violations in the sale of certain assets of the now defunct Cleveland Press Newspaper to the Plain Dealer Newspaper of Cleveland. Numerous parties, including the newspapers and their representative lav/ firms in the transaction, have appealed an order of the district court denying disclosure of grand jury testimony and compelling production of certain documents withheld as privileged attorney-client communications and attorney work product material. Appellant Plain Dealer Publishing Company, its parent company, Advance Publications, Inc., its chairman, S.I. Newhouse, Jr., and their counsel, Sullivan & Cromwell, and Sabin, Bermant & Blau, appeal that part of [159]*159the district court order compelling production of the legal materials and denying a motion to order the secrecy of the grand jury proceedings. Appellant Cleveland Press Publishing Company, along with two of its principals, Joseph E. Cole, and James P. Maloney, Jr., and their intervening counsel, Benesch, Friedlander, Coplan & Aro-noff; Skadden, Arps, Slate, Meagher & Flom; and Williams & Connelly, appeal that part of the district court order denying disclosure of the grand jury document and granting the government’s motion for compelling production of the legal material. We affirm the district court’s denial of the appellants’ motion to disclose grand jury testimony and to order grand jury secrecy, but we reverse and remand, in part, the order compelling the broad production of legal materials.

The undisputed facts giving rise to the grand jury investigation are as follows. Prior to 1980, the Press was owned and operated by E.W. Scripps Company. Scripps had sustained substantial operating losses prior to 1980. On October 31, 1980, Scripps sold the Press to Press Publishing Company and its principal shareholder, Joseph Cole, for one million dollars in cash and a seven million dollar promissory note. When Cole took over operations, he instituted several ideas designed to increase circulation and profits. These changes included installation of modem presses and the introduction of a morning and Sunday edition. Despite these changes, the Press continued to lose money.

Cole met with S.I. Newhouse, chairman of Advanced Publications and the Plain Dealer on two occasions in late 1981, to propose that the two newspapers enter a joint operating agreement as a means of stemming the Press’ continuing losses. Newhouse rejected the idea on both occasions. By late 1981, Cole had formed a limited partnership with James P. Maloney for the purpose of purchasing the Press’ real property.

On February 25, 1982, Maloney incorporated Del-Com with a stated capital of $500 and secured financing of $375,000 in order to commence operations. Del-Com was a telemarketing firm that solicited new subscribers and advertisers exclusively for the Press. It offered a total market program to advertisers throughout the greater Cleveland Metropolitan area. This program was accomplished by providing newspaper advertising inserts to Press subscribers and an identical advertising publication, by either mail or hand delivery, to nonsub-scribers of the Press. Del-Com operated with the assistance of Press employees and facilities.

During the first half of 1982, the Press also commissioned a consultant to contact potential buyers for the Press. By May of 1982, the consultant had found no interested buyers.

Cole met with Newhouse in New York for a third time on March 19, 1982, to discuss again the possibility of a joint operating agreement, but Newhouse rejected the idea. Cole and Newhouse (along with Maloney and each of the principals’ lawyers) met again in New York on May 13, 1982. The substance of this meeting plays a central role in the investigation in this case. Because of the ongoing grand jury investigation, the specifics of that meeting will not be recounted here. Essentially, Newhouse orally agreed to buy the Press’ subscription list for 14.5 million dollars and Del-Com for eight million dollars.

For the next two months the lawyers for the parties negotiated the terms of the sale. The final sales agreement, dated June 10, 1982, provided for the transfer of the subscription list. The Del-Com transaction took the form of an option agreement exercisable on March 1, 1983. On June 17, 1982, the Press announced publicly that it was ceasing its operations.

In 1984, the Antitrust Division of the Department of Justice empaneled a grand jury to investigate possible criminal antitrust violations arising out of the closing of the Press, especially the purchase of the Press’ subscription list and Del-Com by the Plain Dealer. The underlying theory of the government was that the Plain Dealer induced the Press to close by buying its [160]*160assets for substantially more than their actual value in an attempt to monopolize the newspaper market in Cleveland.

This case initially arose from the grand jury issuance of subpoenas duces tecum upon the Plain Dealer, the Press and their legal representatives seeking a number of documents. These parties refused the request for many of the documents, asserting attorney-client privilege and the attorney work product doctrine. Three motions were filed in the district court. The government filed a motion for in camera inspection and to compel production of the documents (Exhibit C) on the basis of a summary of grand jury testimony, called Exhibit B. Each of the parties opposed the motion and the Cleveland Press and its law firms moved for an order disclosing or striking Exhibit B. The Plain Dealer also moved for an order to ensure grand jury secrecy.

The district court wrote an opinion under seal disposing of each motion seriatim. The district court denied the motion to disclose Exhibit B on the basis that disclosure of grand jury testimony would “play havoc with the grand jury’s remaining work.” It granted the government’s motion to compel the production of the documents in part. It ruled that the crime-fraud exception to the attorney client privilege and the work product doctrine required that the parties produce all documents retained solely on the basis of the privilege and all “fact” work product. All “opinion” work product was not ordered to be produced. Finally, the motion to ensure grand jury secrecy was denied for mootness and for not being within the secrecy rule of Rule 6(e)(2) of the Federal Rules of Criminal Procedure.

I.

After reviewing Exhibit B, the district court ruled that the appellants failed to establish that their need for the information outweighed the continued need for grand jury secrecy to permit disclosure under Rule 6(e)(3) of the Federal Rules of Criminal Procedure. It listed three concerns with any release of the information: potential witnesses might be intimidated; witnesses who had already testified could be threatened; and possible targets of the investigation might escape. It relied on this circuit’s opinion in In re Grand Jury Proceedings — Gordon, Witness, 722 F.2d 303 (6th Cir.1983), cert. denied, 467 U.S. 1246, 104 S.Ct. 3524, 82 L.Ed.2d 831 (1984), in upholding its authority to conduct an in camera

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Related

In Re Antitrust Grand Jury
805 F.2d 155 (Sixth Circuit, 1986)

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Bluebook (online)
805 F.2d 155, Counsel Stack Legal Research, https://law.counselstack.com/opinion/advance-publications-inc-v-united-states-ca6-1986.