Source: http://www.justice.gov/atr/cases/f1000/1072.htm
Timestamp: 2014-09-01 14:16:27
Document Index: 167635677

Matched Legal Cases: ['§ 1', '§ 15', '§ 371', '§ 7206', '§ 1291', '§ 1292', '§ 1331', '§ 1367', '§ 2', '§ 1331', '§ 15', '§ 1291', '§ 1292', '§ 1', '§ 371', '§ 7206', '§ 7206', '§ 2942', '§ 7', '§ 2942', '§ 1292', '§ 1292', '§ 1292', '§ 1292', '§ 1292', '§ 2', '§ 59']

formatting). To view the PDF you will need Acrobat Reader, which may be downloaded from the Adobe site. For an official signed copy, please contact the Antitrust Documents Group. 966311
v. MICHAEL HEINRICH; MASTA DISPLAYS CO.; AM-PM SALES CO., INC.;
RALPH T. GIORDANO	STEVEN TUGANDER
JOHN J. POWERS, IIIMARION L. JETTON
PRELIMINARY STATEMENT	JURISDICTION	STATEMENT OF ISSUES	STATEMENT OF THE CASE	NATURE OF THE CASE, COURSE OF PROCEEDINGS, DISPOSITION	STATEMENT OF FACTS	SUMMARY OF ARGUMENT	ARGUMENT	THE REQUEST FOR RELIEF IS MOOT, AND THE APPEAL SHOULD BE
DISMISSED	THE DISTRICT COURT DID NOT HAVE THE POWER TO GRANT INJUNCTIVE RELIEF TO A PRIVATE PARTY	EVEN IF A PRIVATE PARTY HAS A CAUSE OF ACTION FOR ENFORCEMENT OF
RULE 6(E), THIS ORDER CANNOT BE APPEALED BEFORE FINAL JUDGMENT	THE DISTRICT COURT PROPERLY DENIED APPELLANTS' RULE 6(E) MOTION	Trade magazine article	Statement to Customer	Publicly filed documents	CONCLUSION	TABLE OF AUTHORITIES
Anaya v. United States, 815 F.2d 1373 (10th Cir. 1987) Barry v. United States, 865 F.2d 1317 (D.C. Cir. 1989) Blalock v. United States, 844 F.2d 1546 (11th Cir. 1988) Bridge C.A.T. Scan Associates v. Technicare Corp.,
710 F.2d 940 (2d Cir. 1983) Campbell v. Greisberger, 80 F.3d 703 (2d Cir. 1996) Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541 (1949) Coopers & Lybrand v. Livesay, 437 U.S. 463 (1978) Cort v. Ash, 422 U.S. 66 (1975) DiLeo v. Commissioner of Internal Revenue, 959 F.2d 16 (2d Cir.), cert. denied, 506 U.S. 868 (1992) Finn v. Schiller, 72 F.3d 1182 (4th Cir. 1996) Fonar Corp. v. Deccaid Services, Inc., 983 F.2d 427 (2d Cir. 1993) Hsu v. Roslyn Union Free School District No. 3, 85 F.3d 839 (2d Cir. 1996), cert. denied, 117 S. Ct. 608 (1996) In re Grand Jury Investigation (Lance), 610 F.2d 202 (5th Cir. 1980) In re Grand Jury Subpoena, 72 F.3d 271 (2d Cir. 1995) In the Matter of Grand Jury Investigation, 748 F. Supp. 1188 (E.D. Mich. 1990) International Products Corp. v. Koons, 325 F.2d 403 (2d Cir. 1963) McQueen v. Bullock, 907 F.2d 1544 (5th Cir. 1990),
cert. denied, 499 U.S. 919 (1991) Meghrig v. KFC Western, Inc., 116 S. Ct. 1251 (1996) Midland Asphalt Corp v. United States, 489 U.S. 794 (1989) Pavelic & LeFlore v. Marvel Entertainment Group, 493 U.S. 120 (1989) Petereit v. S.B. Thomas, Inc., 63 F.3d 1169 (2d Cir. 1995), cert. denied, 116 S. Ct. 1351 (1996) Prins v. Coughlin, 76 F.3d 504 (2d Cir. 1996)	Ronson Corp. v. Liquifin Aktiengesellschaft, 508 F.2d 399 (2d Cir. 1974) S.R. Mercantile Corp. v. Maloney, 909 F.2d 79 (2d Cir. 1990) Senate of the Commonwealth of Puerto Rico
v. United States Department of Justice, 823 F.2d 574 (D.C. Cir. 1987) Touche Ross & Co. v. Redington, 442 U.S. 560 (1979) Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11 (1979) United States v. Cojab, 996 F.2d 1404 (2d Cir. 1993) United States v. Frank, 225 F. Supp. 573 (D.D.C. 1964) United States v. Haller, 837 F.2d 84 (2d Cir. 1988) United States v. Interstate Dress Carriers, Inc., 280 F.2d 52 (2d Cir. 1960) United States v. John Doe, Inc. I, 481 U.S. 102 (1987) United States v. Mechanik, 475 U.S. 66 (1986) United States v. Midland Asphalt Corp., 840 F.2d 1040 (2d Cir. 1988), affd, 489 U.S. 794 (1989) United States v. Rioux, 97 F.3d 648 (2d Cir. 1996) United States v. Sells Engineering, Inc., 463 U.S. 418 (1983) Xerox Corp. v. SCM Corp., 534 F.2d 1031 (2d Cir. 1976) STATUTES AND RULES
15 U.S.C. § 1 15 U.S.C. § 15 18 U.S.C. § 371 26 U.S.C. § 7206(1) 28 U.S.C. § 1291 28 U.S.C. § 1292(a)(1) 28 U.S.C. § 1331 28 U.S.C. § 1367 Fed. R. Crim. P. 6(e) Pub. L. 95-78, § 2(a), 91 Stat. 319 (1977) MISCELLANEOUS
Sara S. Beale & Wm. C. Bryson, Grand Jury Law
and Practice (1986) James Wm. Moore, Federal Practice (2d ed. 1996) Norman J. Singer, Sutherland Statutory
Construction (5th ed. 1996) S. Rep. 95-354, 95th Cong., 1st Sess. (1977) C.A. Wright et al., Federal Practice and
Procedure (2d ed. 1995) IN THE UNITED STATES COURT OF APPEALSFOR THE SECOND CIRCUIT
Judge Lawrence M. McKenna of the United States District
Court for the Southern District of New York entered the order
appealed from in this case. The order has not been reported.
Plaintiff Philip Morris Incorporated (Philip Morris), who is
not a party to this appeal, asserts that district court
jurisdiction arises under 28 U.S.C. §§ 1331 and 1367, and 15
U.S.C. § 15. J.A. 197.(1) The order being appealed was entered
November 18, 1996 and the notice of appeal was filed December 4,
1996. J.A. 17-18. Defendants/appellants assert that this Court
has jurisdiction to review that order pursuant to 28 U.S.C.
§§ 1291 and 1292(a)(1) (D.Br. at 2). We contend, for the reasons
stated below, that this Court lacks jurisdiction at this time. STATEMENT OF ISSUES
1. Should the appeal be dismissed as moot? 2. Does Rule 6(e), Fed. R. Crim. P., create a private right
of action authorizing a court to enjoin the government from
violating that Rule?
3. Does this Court have jurisdiction to review the order on
appeal as denial of an injunction under 28 U.S.C. § 1292(a)(1), or as an appealable collateral order?
4. Did the district court err in determining that
appellants had not made a prima facie showing of a Rule 6(e)
violation that would entitle them to a hearing? STATEMENT OF THE CASE
The United States moved to intervene in this private
antitrust suit brought by Philip Morris to stay certain discovery
that was likely to interfere with an on-going criminal antitrust
investigation and trial. J.A. 10-11, 165. Appellants Visart
Genetra Affiliates, Inc.(Genetra), three of the defendants in the
private suit, opposed intervention and filed a cross-motion for a
hearing and to enjoin the United States from further alleged
violations of Fed. R. Crim. P. 6(e). J.A. 23-24. The district
court permitted intervention by the United States and stayed
certain discovery in an order filed July 1, 1996. J.A. 165-166,
167-169. Subsequently, on November 18, 1996, the court denied
appellants' request for a show cause hearing and for an
injunction against future Rule 6(e) violations by the United
States. J.A. 292-293.
1. In a complaint filed in January 1995, Philip Morris
alleged that various defendants, including appellants, had
conspired to allocate contracts for the production and supply of
temporary cardboard "point of purchase" graphic displays, which
are used for advertising Philip Morris products at retail
locations. J.A. 1, 164. Philip Morris alleged federal and state
antitrust violations, and also brought claims for common law
fraud and related state law claims. J.A. 164-165. In September
1995, the United States moved to intervene in the civil action
and for an order staying all depositions and answers to
interrogatories until the conclusion of the government's closely-related criminal investigation and "resulting proceedings," which
were being conducted in the same judicial district. J.A. 10-11,
165. The government contended that if civil discovery were not
stayed, the criminal investigation and resulting proceedings
would be prejudiced because any defendants in the civil case that
were subsequently indicted might obtain evidence during civil
discovery that they would not be able to obtain under criminal
discovery rules. J.A. 169.
Appellants opposed intervention by the United States and the
requested stay. J.A. 28. They filed a notice of cross motion in
October 1995, asking for a show cause hearing and an order
"enjoining the intervenor Antitrust Division * * * from making
further disclosures of matters subject to grand jury secrecy and
enjoining the said intervenor from seeking to stay depositions
and interrogatories in this civil action, and granting such other
and further equitable relief" as the court considered proper. J.A. 23-24. In an accompanying declaration filed by appellants'
counsel, two specific claims were made concerning alleged
violations of Rule 6(e)'s secrecy provision by government
attorneys. First, the declaration cited an article in the
July/August 1995 edition of a trade newspaper in which an
Antitrust Division attorney had discussed the government's
investigation. The declaration claimed that the article revealed
matters occurring before the grand jury. J.A. 40-41, 132-133
(article's text). Second, the declaration claimed that one of
the appellants had lost business to a company that was
cooperating with the government, after the government spoke to
appellant's customer during the summer of 1993. J.A. 42, 134-135. In a supplemental affidavit, the attorney recounted hearsay
information about what a government attorney allegedly had said
to the customer about vendors "under investigation." J.A. 136-137. Finally, without claiming any actual breach of Rule 6(e)
secrecy, appellants criticized the government for making public,
with court consent, various plea agreements and sentencing
memoranda that indicated the scope of the conspiracy. J.A. 31-39. The government filed a response (J.A. 144-163) and an
accompanying ex parte affidavit, demonstrating that no Rule 6(e)
violation had occurred and that appellants had failed to make out
a prima facie case. 2. On June 3, 1996, a grand jury sitting in the Southern
District of New York returned an indictment against appellants. Count I of that indictment charged appellants Visart and Siegel
with conspiring to rig bids and allocate contracts for the supply
of display materials awarded by Philip Morris in violation of
section 1 of the Sherman Act, 15 U.S.C. § 1. Count II charged
Siegel and Genetra with conspiring "to defraud the United States
of America and the Internal Revenue Service (IRS) by impeding,
impairing, defeating and obstructing the lawful governmental
functions of the IRS in the ascertainment, evaluation, assessment
and collection of income taxes" in violation of 18 U.S.C. § 371. Finally, Counts III and IV of the June indictment charged
appellant Siegel with making false and fraudulent statements in
violation of 26 U.S.C. § 7206(1). A superseding indictment filed
October 29, 1996, among other things, added appellant Visart as a
defendant in Count II of the indictment and charged appellant
Siegel with three additional violations of 26 U.S.C. § 7206(1). The trial in this criminal case is currently scheduled to begin
June 3, 1997. In any event, appellants' status as targets of the
grand jury investigation has been public knowledge since the
return of the June indictment. 3. Several weeks after appellants were indicted, the
district court in the civil case granted the government's motion
to intervene on July 1, 1996, and stayed discovery until December
31, 1996. J.A. 15, 167-169. The stay was subsequently extended,
at the government's request, to June 30, 1997. J.A. 19, 295. Appellants did not file a notice of appeal from the July order or
from the subsequent order extending the stay. In an order filed November 18, 1996, the court denied
appellants' cross-motion for a show cause hearing and an order
enjoining the government "from making further disclosures of
matters subject to grand jury secrecy." J.A. 292-293. Without
relying on the government's ex parte affidavit,(2) the court
concluded that "[t]he moving defendants have not made a
sufficient showing that the government has disclosed any matters
that occurred before a grand jury in violation of Fed. R. Crim.
P. 6(e)." J.A. 292. Addressing the two specific allegations of
misconduct, the court stated "[r]evelation by the government, as
prosecutor, of its -- as opposed to a grand jury's --
investigation does not violate Fed. R. Crim. P. 6(e)." Ibid. As
to appellants' complaints about public release of plea
agreements, the court noted that these are "presumptively to be
made available to the public, see United States v. Haller, 837
F.2d 84, 85-86 (2d Cir. 1988)" and concluded that no Rule 6(e)
issue was presented, as these were "(in one case) unsealed with
the permission of the Court, and otherwise filed with its
explicit or implicit permission." J.A. 292-293.
This appeal is frivolous. To begin with, this Court does
not have jurisdiction to review the order in question. Even
assuming that appellants' subsequent indictment did not moot the
claim for relief they made in the district court, Rule 6(e) does
not create a private right of action allowing a party to obtain
injunctive relief for alleged violations of the Rule. In any
event, the district court's order is plainly interlocutory and
not subject to appellate review. In a civil case, discovery
orders are not appealable even if phrased as a denial of an
injunction. Similarly, the denial of hearing on a discovery
matter in civil case is not appealable.
Finally, the court's ruling was correct. The claimed
disclosures related only to the government's investigation, not
to matters occurring before the grand jury. Indeed, if
appellants seriously believed that Rule 6(e) had been violated by
the government, they did not have to wait until the government
filed its motion in the civil case to make these allegations. Rather, they could have raised the issue earlier with a judge
supervising the grand jury. Moreover, they could have also
sought sanctions against the government after they were indicted
from the judge assigned to their criminal case. That they
instead raised the issue in a civil case in response to a
government motion concerning discovery in that case strongly
suggests that they were more interested in obtaining information
concerning the government's investigation and its evidence
against them than in litigating the merits of any alleged Rule
6(e) violation.
Appellants claim that in two instances the government
improperly disclosed matters occurring before the grand jury, in
violation of Fed. R. Crim. P. 6(e). They also assert that,
although the government obtained proper court approvals before
filing various plea agreements, the sum of these filings somehow
violated Rule 6(e). Before addressing why the district court
correctly concluded that these alleged Rule 6(e) violations were
so insubstantial that they did not even warrant an evidentiary
hearing, we will first explain why this Court does not have
jurisdiction to review the order in question.
THE REQUEST FOR RELIEF IS MOOT, AND THE APPEAL
Appellants seek review of the district court's order denying
their demand for a show cause hearing and for an "order enjoining
the government (an intervenor) from making further disclosure of
matters subject to grand jury secrecy." J.A. 292 (footnote
omitted). Appellants had asserted, as the basis for the hearing
and injunctive relief, that "public disclosure by the Antitrust
Division of confidential information in the criminal
investigation and matters subject to grand jury secrecy have
caused substantial economic harm to defendants in this civil
action." Memorandum of Law of Defendants * * * In Support of
Cross-Motion for Equitable Relief ("D. Mem. Law") (Dkt. Entry No.
107) at 28-29 (citing Declaration ¶ 31 (J.A. 42-43) and attached
Ex. P). The "public disclosures" of which appellants complained
were the alleged disclosure that appellants were the subject of a
grand jury investigation; and the claimed "economic harm" was
injury to appellants' business reputation. See J.A. 31-42.
In order for a federal court to retain jurisdiction over a
case, an actual controversy must exist "'at all stages of review,
not merely at the time the complaint is filed.'" Prins v.
Coughlin, 76 F.3d 504, 506 (2d Cir. 1996) quoting Preiser v.
Newkirk, 422 U.S. 395, 40[1] (1975)). A case is moot when the
problem sought to be remedied has ceased, and where there is no
reasonable expectation that the wrong will be repeated. Ibid. Injunctive relief looks to the future and is designed to deter. Accordingly, if the conduct at issue has been discontinued and
cannot recur, there is no need for a court to intervene and grant injunctive relief because the case has become moot. See 11A C.A.
Wright et al., Federal Practice and Procedure § 2942, at 47-48 (2d ed. 1995) ("Wright"); see also, e.g., Hsu v. Roslyn Union
Free School District No. 3, 85 F.3d 839, 850 n.3 (2d Cir. 1996)
(suit was moot as to injunctive relief because plaintiff had
graduated; dispute involved a school club), cert. denied, 117 S.
Ct. 608 (1996); Campbell v. Greisberger, 80 F.3d 703, 705-706 (2d
Cir. 1996)(request for injunctive relief against New York Bar
concerning question in bar application was moot where the
question had been discontinued and there was no reason to believe
it would be reinstated); Blalock v. United States, 844 F.2d 1546,
1552 (11th Cir. 1988)(appellant alleged that prosecutor told
appellant's competitor that grand jury was likely to indict
appellant soon; injunction against prosecutor could not issue
because appellant failed to show that further injury was likely
Appellants' demand for hearing and injunctive relief is now
moot because they have been indicted. Their former status as
targets of a criminal investigation is now public information,
and no further economic injury could result from future
disclosure that they were formerly under investigation by a grand
jury. Any prospective customer need only obtain a copy of the
indictment to determine what appellants are alleged to have done. Moreover, much of the government's evidence concerning appellants
has been or will become public as a result of discovery in the
criminal case and the trial that is scheduled to begin in June. Accordingly, the disclosure (and economic injury) of which
appellants complained is not capable of repetition, and their
appeal should be dismissed as moot. See S.R. Mercantile Corp. v.
Maloney, 909 F.2d 79, 81 (2d Cir. 1990)(district court ordered
government to disclose alleged grand jury documents belonging to
appellant; appellants' appeal of order was moot because
government had disclosed the documents in question pursuant to
the district court order).
Appellants asked the district court to review their
allegations that Rule 6(e) had been violated. See United States
v. Rioux, 97 F.3d 648, 662 (2d Cir. 1996); Finn v. Schiller, 72
F.3d 1182, 1187, 1189-1190 (4th Cir. 1996). However, rather than
asking the court to hold the government in contempt, the express
remedy provided in Rule 6(e), appellants instead demanded
injunctive relief. In our view, any claim that the government had violated Rule
6(e) would more properly have been raised with the judge
supervising the grand jury or with the judge subsequently
assigned to the criminal case.(3) This is particularly true since
many of the events in question occurred long before appellants
belatedly raised the issue in the civil case. However, whatever
the forum in which appellants raised the Rule 6(e) issue, they
requested a form of relief that the district could not grant. Specifically, district court had no authority to grant them the
injunctive relief they requested because Rule 6(e) does not
create any private right of action for injunctive relief. Finn ,
72 F.3d at 1186, 1187-1189; In the Matter of Grand Jury
Investigation, 748 F. Supp. 1188, 1198-1206 (E.D. Mich. 1990). Accordingly, they have no right to appeal from the denial of an
injunction that the district court could not grant.(4)
In determining whether a federal statute(5) creates a private
right of action, the "central inquiry" is whether its authors
"intended to create, either expressly or by implication, a
private cause of action." Touche Ross & Co. v. Redington, 442
U.S. 560, 575 (1979); see also Transamerica Mortgage Advisors,
Inc. v. Lewis, 444 U.S. 11, 15-16 (1979). The first task is to
consult the language of the statute itself. Touche Ross & Co,
442 U.S. at 568. Rule 6(e)(2) provides: "No obligation of
secrecy may be imposed on any person except in accordance with
this rule." It then concludes: "A knowing violation of Rule 6
may be punished as a contempt of court." The rule makes no
mention of "impos[ing] * * * obligation[s] of secrecy" by means
of an injunction, and it certainly makes no mention of a private
right to obtain injunctive relief against Rule 6(e) violations. If anything, the Rule suggests that contempt is the only method
of enforcing an obligation of secrecy. Clearly, the language of
Rule 6(e) does not expressly provide a private right of
enforcement by injunction. Finn, 72 F.3d at 1188-1189.
Nor is there any indication in the history of Rule 6(e) that
the Rule provides a private right of injunctive relief. Finn, 72
F.3d at 1188-1189; see also Touche Ross & Co., 442 U.S. at 571,
575-576 (appropriate to consult legislative history in
determining existence of private right of action). At common
law, violation of a grand juror's oath of secrecy was a contempt
(Blalock, 844 F.2d at 1556-1557 (Tjoflat, J. & Roettger J.,
specially concurring); 2 Sara S. Beale & Wm. C. Bryson, Grand
Jury Law and Practice § 7.02, at 5 (1986)), and Rule 6(e), as
originally promulgated, codified the common law rule of grand
jury secrecy (Fed. R. Crim. P. 6(e) (U.S.C.A.), Advisory
Committee Notes, 1944 Adoption). The original version of Rule
6(e) did not include the present last sentence, which states that
knowing violations may be punished as contempt; that sentence was
added in 1977 to "allay fears" that other changes made to the
Rule in that year (relating to provision of grand jury materials
to other government personnel for use in criminal law
enforcement) would "lead to misuse of the grand jury to enforce
non-criminal Federal laws." S.Rep. 95-354, 95th Cong., 1st Sess.
7 (1977). Thus, neither Rule 6(e) as originally promulgated, nor
the legislative history of the 1977 clarifying amendment, makes
any mention of a private right of action for injunctive relief. "[I]mplying a private right of action on the basis of
congressional silence is a hazardous enterprise, at best." Touche Ross & Co., 442 U.S. at 571. Further, where a statute or
rule expressly provides a particular remedy -- here, contempt --
"'a court must be chary of reading others into it.'" Meghrig v.
KFC Western, Inc., 116 S. Ct. 1251, 1256 (1996) (quoting
Transamerica Mortgage Advisors, Inc., 444 U.S. at 19); see also
Cort v. Ash, 422 U.S. 66, 79-80 (1975) (suggesting caution in
reading a private right of action into a criminal statute). The practical consequences of implying a private right to
injunctive relief confirm that such a right was not contemplated
by Rule 6(e)'s authors. First, there is no need to enjoin the
government (or others) to do what is already required by rule. If the government fails to comply with Rule 6(e), a court has the
power, granted by the Rule, to impose a contempt sanction; no
prior notice in the form of an injunction is needed. Further,
injunctions historically have not been issued to prevent crimes,
since such injunctions are viewed as superfluous and
contradictory of the sanction imposed by the legislature for the
crime. See 11A Wright § 2942, at 70-71. In this case, for
example, if the requested injunction were imposed, the government
would merely be ordered to carry out its existing legal
obligation of complying with Rule 6(e), a superfluous
instruction. And confusion would result in the event of a
violation, as to whether punishment would be one contempt
sanction, for violation of Rule 6(e) -- or two, for violation of
Rule 6(e) and the injunction. Structurally, then, Rule 6(e) does
not lend itself to private injunctive relief.
Further, a private right of action for injunctive relief
against the Antitrust Division -- the relief requested in this
case (J.A. 23) -- raises issues of sovereign immunity. The Fifth
Circuit has held, subsequent to Lance, that sovereign immunity
bars a suit against a branch of the U.S. government to enjoin a
violation of Rule 6(e). McQueen v. Bullock, 907 F.2d 1544, 1550-1551 (5th Cir. 1990)(no statute "even remotely suggest[s]" that
United States has agreed to be sued for Rule 6(e) violations),
cert. denied, 499 U.S. 919 (1991).
A private right of action for injunctive relief under Rule
6(e) would also create other problems, and even invite the abuse
of the Rule. If allegations are made of Rule 6(e) violations
occurring in the course of a government criminal investigation,
the government may respond with a filing describing how the
investigation was in fact conducted in order to show that grand
jury secrecy has not been violated. Such a response will often
involve confidential matters of great interest to the targets of
the grand jury, and will be filed ex parte. The court must then
decide, as it was asked to do in this case (see J.A. 169),
whether the government must give the complaining entity access to
this filing. If the complaining entity is viewed as an actual
party to the matter (rather than as a citizen bringing the matter
to the court's attention), its claim of a right to view the
confidential material is far more compelling. And the temptation
for individuals and companies that are under investigation to
make unfounded claims of Rule 6(e) violations in order to obtain
access to such ex parte filings is correspondingly greater.
In view of all these circumstances, there is no reason to
believe that Rule 6(e)'s authors contemplated a private right to
seek injunctive relief. Accordingly, while the district court
could consider appellants' claims of Rule 6(e) violations, its
consideration of these claims did not make appellants a party to
the Rule 6(e) inquiry. The district court had no power to enter
an injunction in their favor, and, accordingly, appellants have
no jurisdictional basis on which to pursue this appeal.
EVEN IF A PRIVATE PARTY HAS A CAUSE OF ACTION FOR ENFORCEMENT OF RULE 6(E), THIS ORDER CANNOT BE APPEALED BEFORE FINAL JUDGMENT Even assuming that appellants' request for a hearing and
injunctive relief is not moot and that Rule 6(e) authorizes them
to seek injunctive relief, the district court's order in this
case is not reviewable as a "final decision" or as an order
denying injunctive relief. The district court's decision to deny appellants any relief
with respect to their claim that the government had violated Rule
6(e) is plainly interlocutory and not final. "A judgment is
considered final when the trial court has conclusively
adjudicated all the issues before it and there remains nothing
left for it to do but execute the order." Petereit v. S.B.
Thomas, Inc., 63 F.3d 1169, 1175 (2d Cir. 1995), cert. denied,
116 S. Ct. 1351 (1996). In this case, the merits of the civil
complaint remain unresolved and, therefore, the district court's
order cannot be considered final.
Nor is the order reviewable as a final collateral order. See generally Cohen v. Beneficial Industrial Loan Corp., 337 U.S.
541 (1949). In the Midland Asphalt case, both this Court and the
Supreme Court had no difficulty concluding that a pre-trial order
in a criminal case denying a motion to dismiss an indictment for
alleged violations of Rule 6(e) was not immediately appealable as
a collateral order. United States v. Midland Asphalt Corp., 840
F.2d 1040, 1045-1046 (2d Cir. 1988), aff'd 489 U.S. 794 (1989). This Court based its decision on its view that post-trial review
is available of an order denying a motion to dismiss an
indictment for violation of Rule 6(e). 840 F.2d at 1046. While Midland Asphalt was a criminal case, its rationale
compels the conclusion that the order at issue in this case is
not reviewable as a collateral order. To fall within the limited
class of final collateral orders, which are immediately
appealable, an order must (1) "conclusively determine the
disputed question," (2) "resolve an important issue completely
separate from the merits of the action," and (3) "be effectively
unreviewable on appeal from a final judgment." Coopers & Lybrand
v. Livesay, 437 U.S. 463, 468 (1978). If, as this Court held in
Midland Asphalt,(6) allegations that Rule 6(e) have been violated
are reviewable on appeal from a final judgment, then a district
court order rejecting those allegations is not "effectively
unreviewable on appeal from a final judgment" (Coopers & Lybrand,
437 U.S. at 468 (footnote omitted)), and "a Rule 6(e) challenge
does not qualify for immediate review under the collateral order
doctrine." 840 F.2d at 1046 (footnote omitted).
There is no reason to treat criminal and civil cases
differently with regard to appeal of Rule 6(e) claims. Indeed,
Court and the Supreme Court have placed on interlocutory appeals
in criminal cases, by allowing resourceful defendants, like
appellants in this case, to assert Rule 6(e) allegations in civil
cases in the hope of obtaining immediate appellate review. Accordingly, the collateral order doctrine does not permit
appellate review of the order in question. Nor is the district court's order reviewable as a denial of
an injunction pursuant to 28 U.S.C. § 1292(a)(1) (D.Br. 2, 20
n.1). This Court has made clear that merely styling a request as
a demand for an injunction is not enough to invoke that statute. As Judge Friendly said in International Products Corp. v. Koons,
325 F.2d 403, 406 (2d Cir. 1963)(footnote omitted):
We think it better, in line with our prior decisions, to
continue to read § 1292(a)(1) as relating to injunctions
which give or aid in giving some or all of the substantive
relief sought by a complaint * * * and not as including
restraints or directions in orders concerning the conduct of
the parties or their counsel, unrelated to the substantive
issues in the action, while awaiting trial.
At issue in Koons, a diversity case, was an order enjoining the
defendants and their attorneys from publishing or disclosing to
any third party anything contained or referred to in depositions
in the action or in documents produced or submitted to the court,
concerning certain payments made to officials of South American
governments. The moving affidavit claimed that the described
material could embarrass the moving party if made public and
would be contrary to the best interests of U.S. foreign policy. The State Department officially supported the order to limit
disclosure. Appellants, claiming constitutional and statutory
errors, appealed the discovery order under 28 U.S.C.
§ 1292(a)(1). 325 F.2d at 404-405 & n.1. This Court concluded
that the order was not appealable either as an injunction or
under the collateral order doctrine. 325 F.2d at 406-407.
This Court consistently has followed Koons in subsequent
cases, holding that district court orders regulating
confidentiality of documents and depositions during civil
litigation are not appealable under section 1292(a)(1), since
they do not give or aid in giving the substantive relief sought
by the complaint, but rather regulate the conduct of the
litigation. See, e.g., Fonar Corp. v. Deccaid Services, Inc.,
983 F.2d 427, 430 (2d Cir. 1993)(protective order, which did not
purport to grant any of the ultimate relief sought, denied
interim review); Bridge C.A.T. Scan Assocs. v. Technicare Corp.,
710 F.2d 940, 943-944 (2d Cir. 1983)(order prohibiting disclosure
of proprietary data contained in an exhibit to the complaint was
not an appealable injunction under § 1292(a)(1)); Xerox Corp. v.
SCM Corp., 534 F.2d 1031, 1031-1032 (2d Cir. 1976)(discovery
orders regarding privilege claims are not subject to
interlocutory appeal); see also Ronson Corp. v. Liquifin
Aktiengesellschaft, 508 F.2d 399, 401 (2d Cir. 1974)(injunction
regarding collateral matters not appealable under § 1292(a)(1));
9 James Wm. Moore, Federal Practice ¶ 110.20[1] at 218 (2d ed.
In this case, appellants raised their Rule 6(e) claim
primarily in the context of seeking to block the stay of civil
discovery that the United States was seeking. Their argument was
that the government had violated Rule 6(e) and therefore should
not be permitted to seek a stay of discovery in the civil case. D.Mem.Law at 4-22. In addition, they sought the order
prohibiting disclosure of confidential Rule 6(e) materials that
is at issue on this appeal. The district court's ruling denying
this latter order did not "give or aid in giving some or all of
the substantive relief sought by a complaint"; rather it
"concern[ed] the conduct of the parties or their counsel,
unrelated to the substantive issues in the action, while awaiting
trial." Koons, 325 F.2d at 406 (footnote omitted). The court
sought only "to regulate disclosures by [a party] during the
course of the litigation." Bridge C.A.T. Scan Assocs., 710 F.2d
at 944. Thus, like the order in Koons, the order here is not
immediately appealable, but must await final judgment in the
If this Court does reach the merits of this appeal, it
should affirm the district court's correct ruling that appellants
had not made out a prima facie case that the government had
violated Rule 6(e).(7) "Before a court will order a hearing on a possible breach of
the Grand Jury Secrecy Rule, the defendant must establish a prima
facie case of a violation of * * * [Rule] 6(e)." United States
v. Rioux, 97 F.3d at 662 (post-trial appeal from denial of motion
to dismiss indictment). Where the complainant relies on media
accounts to establish a prima facie violation (ibid.):
the court should examine, among other factors: (1) whether
the media reports disclose matters occurring before the
grand jury; (2) whether the media report discloses the
source as one prohibited under Rule 6(e); and (3) evidence
presented by the government to rebut allegations of a
violation of Rule 6(e).
To the extent, however, that the media report "discusse[s]
federal 'investigations' without actually discussing matters
before the grand jury," the defendant fails to make out a prima
facie case. Ibid.
As Rioux indicates, Rule 6(e) is violated only if "matters
occurring before the grand jury" are disclosed; and the defendant
has the burden to show that this has happened. See also, Barry
v. United States, 865 F.2d 1317, 1321 (D.C.Cir. 1989)(initial
burden of proof is on complainant). Rule 6(e) does not cover all
information developed during the course of a grand jury
investigation, but rather only information that would reveal the
strategy or direction of the grand jury's investigation, the
nature of evidence produced before the grand jury, the views
expressed by members of the grand jury, or anything else that
actually occurred before the grand jury. See, e.g., DiLeo v.
cert. denied, 506 U.S. 868 (1992); Senate of the Commonwealth of
Puerto Rico v. United States Department of Justice, 823 F.2d 574,
582 (D.C. Cir. 1987); Anaya v. United States, 815 F.2d 1373,
1378-1380 (10th Cir. 1987); United States v. Interstate Dress
Carriers, Inc., 280 F.2d 52, 53-54 (2d Cir. 1960). Information
that does not reveal the "inner workings" of the grand jury is
not covered by Rule 6(e). S.R. Mercantile Corp. v. Maloney, 909
F.2d at 83.
This Court has already applied these principles in Rioux to
hold that the government may speak publicly about its own
investigation without violating Rule 6(e), provided it does not
"actually discuss[] matters before the grand jury." Rioux, 97
F.3d at 662.(8) The same conclusion has been reached by other
circuits. Barry, 865 F.2d at 1320 (newspaper reports that
"mention law enforcement officials only in connection with
'investigations' underway that were not explicitly linked to the
grand jury proceedings" -- such as a report quoting the U.S.
Attorney "as indicating that a long-running secret probe of
federal and local contracts was continuing" -- do not make out a
prima facie case); In re Grand Jury Investigation (Lance), 610
F.2d 202, 217 nn.5, 6 (5th Cir. 1980)(Rule 6(e) does not apply,
inter alia, to disclosures that the government would not decide
whether to seek an indictment until after the impending election;
that the government had attempted to plea bargain with a Lance
associate in return for his testimony against Lance in a criminal
proceeding; or that a "source familiar with the grand jury
inquiry" felt that there would not be a tax action brought
against Lance for use of a bank airplane). Appellants point to two specific incidents that they allege
make out a prima facie violation of Rule 6(e). But, as the
district court correctly determined, appellants failed to make
out a prima facie case because, like certain of the media reports
in Rioux, the government revealed only "its -- as opposed to a
grand jury's -- investigation" (J.A. 292) and thus did not
violate Rule 6(e).
1. Trade magazine article. Appellants claim that an
article appearing in the July/August 1995 edition of the P-O-P
Times (text at J.A. 132-133), a newspaper for the point-of-purchase trade, shows that a government attorney disclosed
matters occurring before the grand jury to that newspaper's
reporter. D.Br. 9-10, 21-22. That article, however, nowhere
refers to any grand jury or any matter occurring before a grand
jury, such as the identity of any grand jury witness, or
testimony given before the grand jury, or the name of any grand
jury target. Rather, the article describes only the government's
investigation. The article begins by making clear that it is describing the
government's investigation: "Describing it as an 'on-going
investigation,' the federal government continues to seek
indictments against P-O-P industry officials on a variety of
antitrust charges." J.A. 132 (emphasis added). The article
describes guilty pleas already entered in an "on-going
investigation by the Antitrust Division," and states that a
Division attorney had said that "[m]ore indictments are
probable"(9) and that "[t]his is an ongoing investigation * * *
More charges will be brought against others in the future. We're
always busy on this case." Ibid. The article next describes in
cooperation agreements with federal officials, and quotes the
government lawyer as saying: "The plea agreements we have signed
with several of the defendants cite information that relates to
additional crimes that the government acknowledges the defendants
won't be prosecuted for." The article then states, without
other companies and individuals arise, and those are being
investigated." The article quotes the government attorney as
"add[ing]" "[t]here are a whole host of names floating out there
in the plea agreements." The attorney is quoted as refusing to
comment on newspaper reports that "[o]ther major New York-based
companies in consumer goods fields" are under investigation, but
as stating "[t]here are different phases of this investigation
under way at all times. * * * The cooperation of some
defendants is leading us to others, and the investigation will
Whether the article is taken as a whole or parsed sentence-by-sentence, the government attorney was discussing only the
government's investigation, and was doing so only in general
terms. When asked to provide individual company names, the
attorney refused.(10) The reference, of which appellants make much
(D.Br. 10), to "a whole host of names floating out there in the
plea agreements" is a reference only to the direction of the
government's investigation, and the source of its leads. Similarly, the attorney's statement that "more charges will be
brought" is a statement of the government's intention. The
attorney merely said it was the government's intention to seek to
institute unspecified charges against unspecified individuals at
an unspecified time in the future. Under Rioux, as well as Barry
and Lance, those statements are not a violation of Rule 6(e)
because they do not disclose matters occurring before the grand
2. Statement to Customer. Appellants also assert (D.Br.
12-14, 26-27), relying on their counsel's hearsay statements
contained in declarations filed with the district court, that the
government violated Rule 6(e) by making disclosures to a former
customer of appellant Genetra. But again, even assuming that the
conversation occurred as related in the declaration, no violation
of Rule 6(e) occurred, because the government is not alleged to
have revealed more than the course of its own investigation.
The declaration by appellants' counsel in support of their
Rule 6(e) motion alleged that Genetra was removed from a list of
vendors after a customer talked with a Division attorney. The
declaration did not recount anything about the substance of the
alleged conversation between the customer and the government
attorney. J.A. 42. The declaration, however, referred to a
second declaration filed under seal (Exhibit O, text at J.A. 134-137), prepared by the same counsel. That declaration, in recounting the alleged conversations,(11) referred to vendors
"under investigation" (J.A. 136), but did not specify whether
this was the grand jury's investigation or the government's
On their face, appellants' allegations do not show a breach
of Rule 6(e), since Rule 6(e) permits the government to talk
about its own investigations. The government responded to these
allegations with a supplemental affidavit disclosing "the context
and full scope and purpose of this particular communication." J.A. 157. This affidavit ultimately was not relied upon by the
court because the court did not consider it necessary to
resolution of the dispute (J.A. 169). The government also
paraphrased the affidavit in its public filing, stating that the
material in the affidavit "makes clear that the government
attorney did not disclose any matters occurring before the grand
jury" and that "the communications with the industry
representative were made solely for purposes related to its
criminal investigation." The government further stated that the
appellants' assertion that the government had divulged
information about its investigation to reward a company that had
cooperated with the government was "entirely baseless and
offensive." J.A. 157.
Under these circumstances, the district court properly
concluded that appellants had failed to make a prima facie case
of a Rule 6(e) violation. The burden was on appellants to show that the government had revealed matters relating to the grand
jury proceedings. Counsel's declaration, if grand jury matters
had in fact been revealed, could have so stated. However, the
declaration referred only to "investigation[s]." In these
circumstances, as the court correctly observed (J.A. 292),
"[r]evelation by the government, as prosecutor, of its -- as
opposed to a grand jury's -- investigation does not violate
[Rule] 6(e)."
3. Publicly filed documents. Finally, appellants complain
about the government's motions to place plea agreements in the
public record, as well as its public filing of sentencing
memoranda. D.Br. 6-9, 10-11, 16, 22-25.(12) Appellants do not
claim that any Rule 6(e) material was disclosed by the plea
agreements; indeed these plea agreements were each filed with the
consent of the presiding district court, as appellants admit
(D.Br. 6-7). But they suggest something sinister in these
filings claiming that they were intended perhaps as a set-up for
the P-O-P (or some similar) article, so that the government could
easily reveal to the public the course of investigations by
referring to these plea agreements when asked by reporters.
The district court correctly rejected this argument. As the
district court observed (J.A. 292-293), there is nothing sinister
about making the text of plea agreements public, particularly
after obtaining the consent of the presiding court. This Court
has held that plea agreements are presumptively to be made
available to the public. United States v. Haller, 837 F.2d 84,
86-87 (2d Cir. 1988). The right of public access to public
trials and pretrial hearings, and related documents, "is the
rule, and it is a rare and exceptional case where it does not
apply." United States v. Cojab, 996 F.2d 1404, 1407-1408 (2d
Cir. 1993). Indeed, the Division generally files its plea
agreements on the public record. Further, under the rationale of
sentencing memoranda, provided they do not reveal grand jury
matters or statutorily protected confidential information.
Second, as we have already shown, Rule 6(e) does not
regulate the government's public disclosure of the course of its
own investigations, provided the government does not, in the
process, disclose matters occurring before the grand jury. Rioux, 97 F.3d at 662. With this qualification, if the
government wishes to discuss its investigation publicly, or file
plea agreements publicly, Rule 6(e) simply does not apply.(13)
Finally, as a factual matter, the plea agreements and
sentencing memoranda cited by appellants revealed nothing about
matters occurring before the grand jury. They make no mention of
who the targets or subjects of any grand jury investigation are
or will be, or the direction of the grand jury investigation. Of
the plea agreements cited by appellants in support of their 6(e)
motion, only the Bert Levine plea agreement mentions any
appellant by name. See J.A. 88-94 (text). That agreement states
that the government will not prosecute Levine for past sales or
supplying of cash or false invoices involving appellant Genetra
(J.A. 90). That statement reflects only the government's
decision (and promise) not to prosecute, and in no way discloses
what occurred before the grand jury. In addition, the sentencing
memorandum for Richard Billies and Sidney Rothenberg (J.A. 108-122) refers to appellant Visart's role in the conspiracy; but the
document nowhere suggests that this information is taken from
grand jury materials or otherwise recounts matters occurring
before the grand jury.(14) In short, none of the materials cited by appellants reveals
matters occurring before the grand jury and relating to
appellants, and therefore, appellants have no basis under Rule
6(e) for complaining about public references by Division
attorneys to these materials.
For the reasons stated above, the appeal should be
dismissed. If this Court reaches the merits of the appeal, the
district court's order should be affirmed.
JOHN J. POWERS, IIIMARION L. JETTON /s/
CERTIFICATE OF SERVICE	I hereby certify that on March 14, 1997, I caused two copies of the foregoing brief BRIEF FOR APPELLEE UNITED STATES OF AMERICA to be served by overnight courier upon:
Ronald E. DePetris, Esq.DePetris & Bachrach620 Fifth AvenueNew York, New York 10020
_______________/s/________________MARION L. JETTON Attorney Antitrust Division Department of Justice Washington, D.C. 20530 (202) 514-3680
MARCH 1997 FOOTNOTES
1. "J.A." refers to the joint appendix filed in this Court.
"D.Br." refers to appellants' main brief filed in this Court.
2. The government's ex parte affidavit in support of its
answer to the Rule 6(e) allegations provided the court with
information on how the investigation was being conducted, what
had in fact been said to the trade newspaper reporter, and the
circumstances of the conversation with the customer. Appellants
demanded to see the affidavit. In its July 1, 1996, ruling on
intervention, the court stated that it had not considered the
affidavit and would not do so for purposes of deciding the cross-motion. J.A. 166, 169. It concluded, "[t]hus, as the document
is irrelevant to a determination, it need not be turned over to
the Defendants." J.A. 169; see also J.A. 166.
3. We are not arguing in this brief that the district court
in the civil case had no authority to determine if appellants had
made a prima facie showing of a Rule 6(e) violation. But
assuming it did, it also had the discretion to refer the issue to
a judge more familiar with the grand jury investigation or the
subsequent criminal case.
4. Since appellants did not request that the government be
held in contempt for violating Rule 6(e), we will not address,
and this Court does not have to decide, whether there is a
private right of action under Rule 6(e) for contempt. The Fourth
Circuit has concluded that there is not. Finn v. Schiller, 72
F.3d at 1187-1189. See also Blalock, 844 F.2d at 1552-1562
(Tjoflat, J. and Roettger, J. specially concurring); In the
Matter of Grand Jury Investigation, 748 F. Supp. at 1198-1206. But see Barry v. United States, 865 F.2d 1317, 1321-1323 (D.C.
Cir. 1989); Blalock, 844 F.2d at 1550-1551 (following binding 5th
Circuit precedent); In re Grand Jury Investigation (Lance), 610
F.2d 202, 212 (5th Cir. 1980). .
5. The last sentence of Rule 6(e) was added by statute in
1977. Pub. L. 95-78, § 2(a), 91 Stat. 319 (1977). The Federal
Rules are generally construed in the same manner as statutes. See, e.g., Pavelic & LeFlore v. Marvel Entertainment Group, 493
U.S. 120, 123-124 (1989); 3 (Supp.) Norman J. Singer, Sutherland
Statutory Construction § 59.09, at 20 (5th ed. 1996). 6. The Supreme Court did not decide whether the order was
not appealable on the basis of this Court's rationale or because,
under the rationale of United States v. Mechanik, 475 U.S. 66
(1986), the order "cannot be said to 'resolve an important issue
completely separate from the merits of the action.' Coopers &
Lybrand [v. Livesay, 437 U.S. 463,] 468 [1978]." Midland Asphalt
Corp v. United States, 489 U.S. 794, 799-800 (1989).
7. This Court reviews district court decisions regarding
Rule 6(e) disclosure for abuse of discretion. United States v.
John Doe, Inc. I, 481 U.S. 102, 116 (1987); In re Grand Jury
Subpoena, 72 F.3d 271, 275 (2d Cir. 1995). 8. Appellants cite United States v. Sells Engineering, Inc.,
463 U.S. 418 (1983) to show that 6(e) materials cannot be used in
civil litigation except in compliance with Rule 6(e). D.Br. 15-17. While this is clearly correct, Sells is of limited relevance
to this case because it involved a request for permission to
disclose matters occurring before the grand jury; this case, by
contrast, involves the question whether disclosure occurred. 9. The government's publicly filed Memorandum in Opposition
makes clear that the Division attorney likely was misquoted, and
in fact stated that "more charges" (not "more indictments") would
be brought. The reporter may not have understood the distinction
between indictments and informations. Two informations were in
fact filed in September. J.A. 154. Elsewhere in the article,
the reporter correctly refers to "charges." The district court
could consider the government's explanation in deciding if
appellants had made out a prima facie case. See Rioux, 97 F.3d
at 662 (court should consider "evidence presented by the
government to rebut allegations of a violation of Rule 6(e)").
10. Appellants assert (D.Br. 23) that the government failed
to deny that the Division attorney's references were to "subjects
and targets of the grand jury investigation." This is incorrect;
the government's memorandum discusses this issue at length,
asserting that the P-O-P article "contains no information
relating to matters occurring before the grand jury."
See, e.g., J.A. 153-156.
11. Appellants did not file an affidavit by the person who
actually talked to the government attorney, nor explain why such
an affidavit could not be obtained. They did not even reveal
their source's name in the declarations. The government urged
the district court not to rely on counsel's hearsay statements,
citing United States v. Frank, 225 F. Supp. 573, 575 (D.D.C.
1964) (affidavit in support of motion alleging 6(e) violation
which was based on hearsay was insufficient in face of government
affidavit based on direct knowledge). J.A. 157 (n.2).
12. Appellants also claim (D.Br. 4) that the civil action
was a "direct result" of the alleged Rule 6(e) violations. This
assertion is false. According to the complaint, Philip Morris
began its investigation on its own in 1989, after receiving an
anonymous complaint. This resulted in the discharge of employees
Michael Heinrich and Louis Cappelli in September 1991. J.A. 225-230; see also J.A. 116-117. Philip Morris then contacted the
Antitrust Division in early 1992 with the evidence it had
developed (J.A. 230) and the Division commenced an investigation. Cappelli's counsel thereafter contacted Philip Morris in April
1993 in an attempt to settle any civil claims that Philip Morris
might have had against him. J.A. 231. Cappelli eventually, in
February 1994, entered into a settlement agreement with Philip
Morris, pursuant to which he provided information to it on
"previously unknown details concerning the bid-rigging and
bribery conspiracy." J.A. 233. A salesman for a supplier, John
Clemence, also approached Philip Morris to discuss settling civil
claims, and reached a settlement which involved providing
information to Philip Morris on the conspiracy. J.A. 233-234.
Appellants are simply wrong is asserting (D.Br. 3-4) that Philip
Morris "began this civil suit only after the Antitrust Division
made Cappelli and Clemence available to it for interviews
concerning the facts underlying the criminal case and this
lawsuit." Clemence and Cappelli were free to speak to anyone
they chose, and they apparently spoke to Philip Morris for their
own personal reasons, to settle civil liabilities. 13. Appellants claim that the Fourth Circuit in Finn v.
Schiller remanded the case because the prosecutor had publicly
filed a "sweeping statement of fact" alleging violations by
unindicted individuals. D.Br. 24. It appears, however, that the
district court in Finn did not hear the merits, and the remand
was ordered to consider the complainant's allegations for the
first time. 72 F.3d at 1185, 1186, 1189 n.7, 1191.
14. At his sentencing, Rothenberg referred to his dealings
with Visart (J.A. 125-126), but he was speaking from his own
experience. Similarly, sentencing memoranda in Levine's and
Berger's cases refer to what was said about Visart at allocutions
in other cases (J.A. 129, 131), but this is not grand jury