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Commodity Futures Trading Commission 

CEA CASES 

NAME: VINCENT W. KOSUGA, SAM S. SIEGEL, AND NATIONAL PRODUCE DISTRIBUTORS, INC. 

CITATION: 16 Agric. Dec. 665 

DOCKET NUMBER: 73 

DATE: JULY 18, 1957 

DOCUMENT TYPE: ORDER REMANDING PROCEEDING TO REFEREE 

AGRICULTURE DECISIONS

BEFORE THE SECRETARY OF AGRICULTURE

UNITED STATES DEPARTMENT OF AGRICULTURE

(No. 5085) 

In re VINCENT W. KOSUGA, SAM S. SIEGEL, AND NATIONAL PRODUCE DISTRIBUTORS, INC. 

CEA Docket No. 73. Decided July 18, 1957. 

Proceeding Remanded to Referee

Complainant has made freely available to respondents by virtue of the ruling 

in Jencks v. United States, 353 U.S. 657, transcripts of investigatory 

statements made by persons prior to their appearance as witnesses for 

complainant at hearing before referee but has not made available to respondents 

the statement of one person who did not appear as a witness at the hearing. The 

complainant had previously refused to make the transcripts available except to 

the referee for his examination and for disclosure by him to respondents of any 

material of impeachment value to respondents. Since respondents have gotten 

what they sought except for a statement not required by law to be made available 

to them, the proceeding is remanded to the referee for further hearing. 

Mr. Benj. M. Holstein, for Commodity Exchange Authority. Mr. Lee A. Freeman, of 

Chicago, Illinois, and Mr. Michael A. Gurda, of Middletown, New York, for 

respondent Vincent W. Kosuga. Mr. Max Chill, of Chicago, Illinois, for remaining 

respondents. Mr. John Curry, Referee. 

Decision by Thomas J. Flavin, Judicial Officer

ORDER REMANDING PROCEEDING TO REFEREE

This is a disciplinary proceeding under the Commodity Exchange Act (7 U.S.C. 

Chapter 1). The respondents are charged 

with attempting to manipulate, and with manipulating, the prices of onions in 

interstate commerce and for future delivery on or subject to the rules of the 

Chicago Mercantile Exchange. 

Following presentation of the complainant's evidence at a hearing upon the 

complaint and answers the referee issued a report on May 3, 1957, recommending 

that the complaint be dismissed and the proceeding terminated. The basis for 

the recommendation was the complainant's refusal to furnish to the respondents 

transcripts of sworn testimony given before investigators of the Commodity 

Exchange Authority. The transcripts in question are those which cover the 

interrogation of Jack Kelly, LaCerne Dixon, William Gehring, Mike Minardo, Lyle 

Jordon, Veril Baldwin, and Carl Jarson. All these persons except Carl Jarson 

also testified at the administrative hearing upon the complaint and answers 

which was presided over by the referee. In response to a subpoena duces tecum 
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issued by the referee to the Administrator, Commodity Exchange Authority, the 

complainant had offered to make the transcripts available to the referee for his 

examination and for disclosure by him of any materials in the investigatory 

transcripts which he considered of impeachment value to the respondents. The 

respondents rejected such proffer and the refusal of the complainant to make the 

transcripts freely available to the respondents resulted in the referee's report 

recommending that the complaint be dismissed. 

The complainant filed lengthy exceptions to the referee's report on May 23, 

1957. The respondents asked for and received permission to file answers to the 

complainant's exceptions and also requested oral argument thereon. An answer to 

the complainant's exceptions was received on June 17, 1957, together with a 

request for oral argument. 

On June 26, 1957, the complainant filed a statement referring to the decision 

of the United States Supreme Court in Jencks v. United States, 353 U.S. 657 

(1957), in which the Court held that in a criminal case the defendant was 

entitled to inspect reports in the Government's possession made by Government 

witnesses concerning matters to which the witnesses later testified at the 

trial. The statement says: "While we have some question as to whether the 

ruling in the Jencks case applies to administrative proceedings, a decision on 

the merits in this proceeding is of paramount importance in the public interest. 

Accordingly, the Commodity Exchange Authority has requested and obtained from 

the Secretary of Agriculture authority to furnish to the 

respondents or their counsel the transcripts of the sworn statements obtained by 

the Commodity Exchange Authority from those persons described in the referee's 

subpena who were later called as witnesses in this proceeding." The statement 

continues to recite that the transcripts of the investigatory statements of the 

persons listed in the subpoena, except Carl Jarson, had been transmitted to 

counsel for the respondents and the statement requests that the proceeding be 

remanded to the referee and the matter set down for further hearing. Counsel 

for the respondents in letters to the Judicial Officer objected to the 

complainant's request to remand the proceeding. 

The referee's recommendation for dismissal is based entirely upon the 

complainant's refusal to make the investigatory statements freely available to 

the respondents. The statements have now been made available to the respondents 

because of the decision of the United States Supreme Court in the Jencks case 

and the proceeding should accordingly be remanded to the referee unless the 

complainant is also required to make available the results of the examination of 

Carl Jarson who has not testified as a witness at the hearing and who apparently 

will not be called as a witness by the complainant since the complainant has 

completed its presentation of witnesses. Assuming that the ruling in the Jencks

case applies in an administrative proceeding such as this, the ruling does not 

cover reports or investigatory examinations of persons who do not testify as 

witnesses in the proceeding. Jarson's statements made pursuant to an 

investigatory subpoena even though after the issuance of the complaint were 

privileged under the regulations of the Department (7 CFR 1.2) and we are not 

aware of any requirement of law that would compel access to such statements by 

the respondents. 

The respondents seek to urge now reasons for the dismissal of the complaint 

in addition to the basis of the referee's recommendation. Argument upon these 

matters at this stage would be premature. In the light of the foregoing, we do 

not believe oral argument to be necessary now and the proceeding is remanded to 

the referee for further hearing. 

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