United States v. Cuisinarts, Inc.

665 F.2d 24
CourtCourt of Appeals for the Second Circuit
DecidedNovember 19, 1981
DocketNo. 180; Docket 81-7338
StatusPublished
Cited by1 cases

This text of 665 F.2d 24 (United States v. Cuisinarts, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Cuisinarts, Inc., 665 F.2d 24 (2d Cir. 1981).

Opinion

IRVING R. KAUFMAN, Circuit Judge:

The long shadows of history enshroud the precise moment when the first grand jury was established in an English-speaking community. It appears, however, that a rudimentary ancestor of our modern grand jury was an integral element of the system of justice in medieval England over eight hundred years ago. Our forefathers carried [28]*28this tradition to America and embedded its inherent powers in the Fifth Amendment of our Constitution. As this institution evolved over the centuries, its proceedings were cloaked with secrecy to guard against injury to reputations of the innocent to protect witnesses from retaliation or intimidation, and to promote the grand jury’s effectiveness as an investigative device. This time-honored policy of secrecy has been the most essential, indeed indispensable, characteristic of grand jury proceedings.

Today, we are asked to lift this veil of secrecy. The States of Connecticut, Rhode Island, Vermont, New York, Colorado, New Jersey, North Carolina, Maine, New Hampshire, Maryland, Texas, and Wisconsin, and the Commonwealths of Massachusetts and Virginia (“States”) would have us determine whether section 4F(b) of Title III of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. § 15f(b),1 permits the disclosure of grand jury materials to a state attorney general without the traditional showing of compelling and particularized need.2 The Fourth3 and the Ninth Circuits 4 have earlier ruled that such a showing is not required. We disagree with their holding, as has the Seventh Circuit.5 Judge Cabranes properly concluded that establishing particularized . need is a requisite of gaining access to grand jury materials pursuant to section 4F(b) and Rule 6(e)(3)(C)(i) of the Federal Rules of Criminal Procedure.6 Because the States failed to meet this standard, the district court refused to order disclosure to the States. We affirm.

I

The journey along the path leading to this appeal began several years ago. In 1979, the Antitrust Division of the United States Department of Justice commenced an investigation of the marketing practices of Cuisinarts, Inc., a corporation that dis[29]*29tributes electric appliances known as food processors throughout the United States. In June 1980, a special grand jury was empanelled in the District of Connecticut as a result of this investigation. After hearing testimony from twenty-three witnesses and having over 50,000 documents submitted to it, the grand jury returned an indictment charging Cuisinarts with having conspired to fix, stabilize, and maintain retail prices of its food processors. The indictment alleged that such resale price maintenance amounted to a combination and conspiracy in unreasonable restraint of interstate trade, and therefore constituted a felony in violation of section 1 of the Sherman Act, as amended, 15 U.S.C. § 1. On the same day, the United States filed a companion civil complaint based upon the same factual allegations as the grand jury’s indictment, seeking injunctive relief.

Both actions were substantially resolved in December 1980. Cuisinarts entered, and the court accepted, a plea of nolo conten-dere on the criminal charge. The court imposed a fine of $250,000. In the civil action, the United States and Cuisinarts stipulated to the submission of a proposed final judgment. In accordance with the terms of the proposed judgment, which the court adopted, Cuisinarts was enjoined from, inter alia, fixing the prices at which its food processors could be sold. This action was concluded in March 1981.

This litigation by the federal government, we note, involved the first federal criminal prosecution for vertical price fixing in many years — at least since the penalty for violating the Sherman Act was increased to a felony in 1974. Accordingly, it provided the impetus for the institution of a large and proliferating number of suits by state governments and private consumers. Shortly after the return of the federal indictment, private antitrust actions against Cuisinarts and its retailers commenced to flood the federal courts. To ease the burden this litigation imposed both on parties and on our judicial system, in January 1981, the Judicial Panel on Multidistriet Litigation ordered, pursuant to 28 U.S.C. § 1407, that eight such actions were to be consolidated for pretrial proceedings in the District of Connecticut. By March, in accordance with the Panel’s orders, four additional cases against Cuisinarts were transferred and consolidated with those already before the court, including a parens patriae action brought by the Commonwealth of Massachusetts. In the same month, a parens patriae suit instituted by the State of New Jersey was transferred to the District of Connecticut. As a result, thirteen civil actions were before the court for consolidated pre-trial proceedings. Of these, seven included claims pursuant to Federal Rules of Civil Procedure, Rule 23 for the certification of a nationwide class of purchasers of Cuisinarts food processors.

The States, after receiving notice from the Department of Justice of the indictment against Cuisinarts,7 sought all investigative materials relating to the government’s criminal action against Cuisinarts in the possession of the United States Attorney General, pursuant to section 4F(b) of the Hart-Scott-Rodino Act. By letter, the Department of Justice advised the States that it would provide a copy of the indictment and civil complaint as well as copies of internal memoranda from the Department’s files. The materials used or generated by the grand jury, the Department of Justice stated, would not be made available absent a court order pursuant to Fed.R.Crim.P. 6(e). Accordingly, commencing in January and continuing through March 1981, the attorneys general of fifteen states, individually and in groups, filed motions under [30]*30section 4F(b) of the Hart-Scott-Rodino Act and Fed.R.Crim.P. 6(e) seeking an order which would allow them to inspect and copy-all grand jury materials produced by the federal grand jury’s investigation resulting-in the criminal indictment of Cuisinarts for resale price maintenance.8 The United States did not object to disclosure. Two of the states, Massachusetts and New Jersey, had already brought parens patriae actions against Cuisinarts.9 The other thirteen were apparently contemplating such actions.

In considering these motions, Judge Ca-branes found that section 4F(b) was not intended to eliminate the showing of compelling and particularized need required for disclosure of grand jury materials.

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Related

In Re: Grand Jury Investigation Of Cuisinarts, Inc.
665 F.2d 24 (Second Circuit, 1981)

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Bluebook (online)
665 F.2d 24, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-cuisinarts-inc-ca2-1981.