Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-md-01827/USCOURTS-cand-3_07-md-01827-178/pdf.json

Nature of Suit Code: 410
Nature of Suit: Antitrust
Cause of Action: 15:1 Antitrust Litigation

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

IN RE: TFT-LCD (FLAT PANEL) ANTITRUST

LITIGATION

 /

This Order Relates to:

ALL CASES

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No. M 07-1827 SI

MDL. No. 1827

STATEMENT OF REASONING

INVOLVED IN COURT’S ORDER OF

FEBRUARY 11, 2010

The Court issued an order, filed under seal, on February 11, 2010. The Government objects to

a request made by certain defendants to unseal that order. The Government asserts that unsealing the

order would violate Rule 6(e)(6) of the Federal Rules of Criminal Procedure, which governs grand jury

proceedings. The Government adds, however, that “the Court is fully aware of its legal reasoning and

is at liberty to draw upon and even share its reasoning in the context of the civil dispute.” The Court

does so here.

BACKGROUND

Shortly after the civil cases were transferred to this district for multidistrict proceedings, the

Department of Justice sought to intervene in the MDL for the purpose of seeking to limit discovery in

the civil actions. By order filed July 10, 2007, the Court permitted the DOJ to intervene. The DOJ then

moved to stay civil discovery on two grounds. First, the DOJ asserted that because civil discovery is

broader than criminal discovery, there was the risk that parties in the civil action would be able to

discover sensitive information about the grand jury investigation through civil discovery. Second, the

DOJ argued that if civil discovery proceeded in tandem with the grand jury proceedings, employees of

Case 3:07-md-01827-SI Document 1646 Filed 03/29/10 Page 1 of 4
United States District Court

For the Northern District of California

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the companies under investigation could be placed in the untenable position of having to choose between

asserting their Fifth Amendment right against self-incrimination in a civil deposition, with the negative

inference that comes with that decision, or testifying in a civil deposition and running the risk of

self-incrimination in the criminal matter. The Court granted the DOJ’s motion to stay discovery until

May 2008, but permitted certain limited categories of non-grand jury discovery to proceed. The stay

order permitted the DOJ to review but not copy all discovery produced by a party. Docket No. 306 in

M 07-1827 SI. In May 2008, the stay order was revised to permit certification discovery. 

The parties in the MDL negotiated a protective order to preserve the confidentiality of the

documents produced pursuant to civil discovery. The December 10, 2007 stipulated protective order

provides that the parties may use civil discovery materials “only in connection with this [civil] action

for prosecuting, defending, or attempting to settle this action.” In 2009, the DOJ sought to modify the

September 2007 stay order to allow the DOJ to copy, and not just review, all documents produced in

the MDL. The Court initially granted the motion, but in response to concerns raised by defendants,

referred the parties to the Special Master to explore modifications to the discovery plan. After briefing

and a hearing, the Special Master recommended that DOJ be permitted to review all civil discovery, but

prohibited from making any copies of the overseas discovery, including deposition transcripts, of the

unindicted defendants. The Special Master found that the DOJ’s request for all civil discovery would

expand the DOJ’s subpoena power beyond its current geographical limits. The Special Master stated

that “[t]he critical issue is whether allowing the DOJ to have copies of foreign discovery brought into

the United States under court order does indeed grant to the United States foreign discovery that would

otherwise be outside the grand jury’s subpoena power,” and she noted that the foreign defendants had

“vociferously argued against producing either their documents or their employees into this country

during this entire litigation.” Report & Recommendation Re: Toshiba Entities’ Motion for

Modifications to the Discovery Schedule and Plan at 2:25-26 (emphasis added). The Special Master

found that “those defendants are still guaranteed certain protections regarding criminal proceedings and

those protections must be safe-guarded, so that the government does not overstep its power, intentionally

or otherwise.” Id. at 3. The Special Master was also concerned that any criminal indictments that

flowed from the grand jury’s review of overseas documents produced in the civil matter could be subject

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United States District Court

For the Northern District of California

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to challenge. This Court adopted the Special Master’s R & R in an order filed October 20, 2009. That

order provided that “the United States shall be limited to reviewing access only, without the right to

copy foreign documents and deposition transcripts of foreign national employees of the Toshiba Entities

and AUO, as well as the other non-indicted foreign defendant (such as . . . Hannstar Display

Corporation).”

DISCUSSION

The central question considered in the February 11, 2010 order was whether a grand jury may

subpoena foreign-based documents that would otherwise be outside the geographic scope of its

subpoena power, but that are located in the United States by virtue of the civil discovery in a related

MDL proceeding. The documents in question might otherwise be obtained by (1) letters rogatory, (2)

requests made under executive agreements or treaties, such as mutual legal assistance treaties, and (3)

informal means. 

The Court considered In Re Grand Jury Subpoena Served on Meserve, Mumper & Hughes, 62

F.3d 1222 (9th Cir. 1995), to determine whether the grand jury might have the authority to subpoena

such foreign documents. In Meserve, the Ninth Circuit established a per se rule that protective orders

cannot shield discovery from grand jury subpoenas, and the court held that a criminal grand jury could

subpoena documents that were subject to a protective order in a closed civil case. Id. at 1226. While

there is broad language in Meserve regarding the power of the grand jury, Meserve did not address the

grand jury’s authority to subpoena foreign evidence that would otherwise be outside its subpoena power,

or the interplay between criminal grand jury proceedings and ongoing civil proceedings involving

unindicted foreign defendants. It often happens that civil cases are filed on the heels of an

announcement about a criminal grand jury investigation, and related foreign-based evidence and

depositions may be present in the United States solely because of the civil discovery. Ordinarily a grand

jury would be required to obtain foreign material through letters rogatory or other methods. The Court

did not find precedent in the case law, and was dubious about establishing such precedent, to permit

grand juries to obtain foreign discovery for criminal grand jury proceedings when that evidence is

present in the United States only as a result of related civil actions. 

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United States District Court

For the Northern District of California

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The Court felt it possible that such actions might ultimately jeopardize the criminal proceedings.

The Court therefore found it is prudent allow the appellate process to establish such precedent if

appropriate.

Dated: March 29, 2010 

SUSAN ILLSTON

United States District Judge

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