Court Opinion

ID: 769181
Source: CourtListenerOpinion
Date Created: 2012-04-18 09:47:15+00
Date Added: 2024-06-11T13:18:21.855943
License: Public Domain

216 F.3d 621 (7th Cir. 2000)
In re: High Fructose Corn Syrup Antitrust LitigationDellwood Farms, Inc., et al.,    Plaintiffs-Appellants/Cross-Appellees,v.Archer Daniels Midland Company,    Defendant-Appellee/Cross-Appellant.James R. Randall,    Intervenor-Appellee/Cross-Appellant.
Nos. 99-2032, 99-2147, 99-2148, 99-2220, 99-2313, 99-2352, 99-2420, 99-3040, 99-3041, 99-3042.
In the  United States Court of Appeals  For the Seventh Circuit
Argued April 14, 2000Decided June 19, 2000

Appeals from the United States District Court  for the Central District of Illinois.  Nos. 95 C 1477, 97 C1203--Michael M. Mihm, Judge.
Before Posner, Chief Judge, and Ripple and Rovner,  Circuit Judges.
Posner, Chief Judge.

1
These appeals grow out of a  class action antitrust suit that is pending in a  federal district court in Illinois. The suit is  by purchasers from Archer Daniels Midland and  other manufacturers and charges price fixing. In  an earlier criminal investigation of the alleged  price-fixing conspiracy, an investigation that  led to criminal proceedings unnecessary to  discuss here, an ADM vice president named  Whitacre made a number of secret recordings both  of face-to-face conversations, and telephone  conversations, with persons who he thought might  be (and most of them were, but not intervenor  Randall) involved in the conspiracy. He did this  under unusual circumstances. He had been  defrauding ADM and apparently wanted to deflect  the FBI's suspicions and so reported his  employer's price fixing to the FBI and suggested  that he tape record incriminating conversations.  The FBI agreed. Some of the recordings were used  in the criminal proceedings but many were not,  and those that were not remain in the files of  the Justice Department. The plaintiffs in the  class action have subpoenaed those recordings.  ADM resisted the subpoena, along with its former  employee Randall who though not implicated in the  price fixing fears that some of the recordings  contain embarrassing statements by him on  unrelated matters. The Justice Department has no  objection to releasing the recordings to the  plaintiffs. The district judge ruled that the  plaintiffs are entitled to them but, in the case  of the telephone conversations, not until the  trial. His ruling is before us under 28 U.S.C.  sec. 1292(b).

2
A set of provisions of the federal criminal code  commonly known as "Title III" regulates  electronic surveillance both of "oral  communications" and "wire communications." 18  U.S.C. secs. 2510 et seq. The latter term is  broadly defined to include communications any  part of which goes over a wire; so cellphone and  satellite communications are covered. See 18  U.S.C. sec. 2510(1); H.R. Rep. No. 647, 99th  Cong., 2d Sess. 31 (1986); United States v.  Jackson, 207 F.3d 910, 914 (7th Cir. 2000);  United States v. Rivera, 153 F.3d 809, 810-11  (7th Cir. 1998); United States v. Carrazana, 921 F.2d 1557, 1562 (11th Cir. 1991); Shubert v.  Metrophone, Inc., 898 F.2d 401 (3d Cir. 1990); 1  James G. Carr, The Law of Electronic Surveillance  sec. 3.2(a), p. 3-5 (2000). The former term  ("oral communications") is rather narrowly  defined as a nonelectronic "oral communication  uttered by a person exhibiting an expectation  that such communication is not subject to  interception under circumstances justifying such  expectation." The district judge thought that the  face-to-face conversations that Whitacre  surreptitiously recorded were not oral  communications within this definition and so were  outside the protections of the statute. The judge  reasoned that the people whose conversations  Whitacre was recording could have had no basis  for supposing their conversations not subject to  being recorded by one or more of the  participants, because the only basis for such an  expectation could be the Fourth Amendment, which  has been held inapplicable to the recording of  conversations to which one of the parties  consents. United States v. Caceres, 440 U.S. 741,  750 (1979); United States v. White, 401 U.S. 745,  751-52 (1971); Lopez v. United States, 373 U.S. 427, 439 (1963); United States v. Eschweiler, 745 F.2d 435, 437 (7th Cir. 1984).1

3
The telephone conversations that Whitacre  recorded clearly fell within the statutory  definition of wire communications. But the judge  thought a limited disclosure of their contents to  the plaintiffs authorized by section 2517(3),  which allows a person to disclose the contents of  lawfully intercepted wire communications "while  giving testimony under oath or affirmation in any  proceeding held under the authority of the United  States or of any State or political subdivision  thereof." The judge rejected the argument that  the only proceeding contemplated by this  provision is a government proceeding, not a  private suit such as we have here. But because he  interpreted "while giving testimony" literally,  to mean that the plaintiffs had no authority to  obtain the recordings of Whitacre's wire  communications until the trial, he thought it  premature to decide whether those communications  had been intercepted lawfully, which would mean  in conformity with either section 2511(2)(c) or  section 2511(2)(d). The first of these  subsections provides that it is not unlawful  under Title III for a person acting under color  of law to record his own conversations, and the  second that it is not unlawful for a person not  acting under color of law to record his own  conversations provided that he is not doing so  for the purpose of committing a crime or tort.

4
The district judge was following the law of this  circuit in holding that in defining "oral  communications" by reference to a justifiable  expectation that they would not be intercepted,  Congress had limited the protection of the  statute to situations in which the interception  would violate the Fourth Amendment if done by the  government. In re John Doe Trader Number One, 894 F.2d 240 (7th Cir. 1990); see also Dorris v.  Absher, 179 F.3d 420, 424-25 (6th Cir. 1999);  United States v. Longoria, 177 F.3d 1179, 1181-82  (10th Cir. 1999); Siripongs v. Calderon, 35 F.3d 1308, 1320-21 (9th Cir. 1994). One might wonder  why, if the statute tracks the Fourth Amendment,  the statute's drafters bothered to carve an  express exception for oral communications  intercepted by one of the parties to the  communication, given that such interceptions do  not violate the Fourth Amendment. Some cases in  other circuits suggest, in conformity with the  statutory language, that there can be a  reasonable expectation that one's conversations  even if not private will not be intercepted  electronically. See, e.g., Angel v. Williams, 12 F.3d 786, 790 n. 6 (8th Cir. 1993); Walker v.  Darby, 911 F.2d 1573, 1578-79 (11th Cir. 1990);  Boddie v. American Broadcasting Companies, Inc.,  731 F.2d 333, 338-39 and n. 5 (6th Cir. 1984).  None of the cases, however, involves recording  one's own conversations, as in this case.

5
Another issue on which there is no case law in  this circuit is whether the strangely worded  section 2517(3) is limited to legal proceedings  brought by the government, as held in In re  Motion to Unseal Electronic Surveillance  Evidence, 990 F.2d 1015, 1018-20 (8th Cir. 1993)  (en banc), and National Broadcasting Co. v.  United States Department of Justice, 735 F.2d 51  (2d Cir. 1984), although the wording seems merely  a shorthand for the longer and unambiguous  definition in the complementary section 2515 of  proceedings as covering "any trial, hearing, or  other proceeding in or before any court, grand  jury, department, officer, agency, regulatory  body, legislative committee, or other authority  of the United States, a State, or a political  subdivision thereof." See also section  2518(10)(a). Another issue on which authority is  scanty is whether section 2517(3) is limited to  trials and so excludes discovery, which would be  a particularly strange limitation, though it was  adopted (albeit in the briefest of discussions)  in In re Motion to Unseal Electronic Surveillance  Evidence, supra, 990 F.2d at 1020.

6
Regardless of how any of these issues is  resolved, we think the plaintiffs are entitled to  all the recordings, to use as they see fit except  insofar as the district judge may exercise his  power under the Federal Rules of Civil Procedure  to limit, by protective order or otherwise, such  disclosure of the contents of the recordings as  may infringe the privacy of parties to the  recorded conversations beyond what the plaintiffs  require to prosecute their antitrust case  effectively. Fed. R. Civ. P. 26(c); Gile v.  United Airlines, Inc., 95 F.3d 492, 496 (7th Cir.  1996); Jepson, Inc. v. Makita Electric Works,  Ltd., 30 F.3d 854, 858-59 (7th Cir. 1994); 8  Charles Alan Wright, Arthur R. Miller & Richard  L. Marcus, Federal Practice & Procedure sec. 2036  (2d ed. 1994).

7
Some states prohibit a person from recording his  telephonic or other conversations without the  other person's consent, but Title III does not,  unless the person both is not acting under color  of state law and has a criminal or tortious  purpose. 18 U.S.C. secs. 2511(2)(c), (d).  "While Title III . . . regulates electronic  surveillance conducted without the consent of  either party to a conversation, federal statutes  impose no restrictions on recording a  conversation with the consent of one of the  conversants." United States v. Caceres, supra,  440 U.S. at 750. (This is a little broad, in  ignoring the exception in section 2511(d) for bad  purpose.) If by virtue of sections 2511(2)(c) or  (d) an interception is not prohibited by Title  III, there are no Title III restrictions on its  use. Section 2517(3) does not come into play and  such questions as whether the section authorizes  disclosure only in government proceedings and  only at trial drop out; the meaning of "oral  communications" also becomes moot.

8
That interceptions exempted by sections  2511(2)(c) or (d) are not subject to section  2517(3) is apparent from the structure of Title  III. Section 2511(1) forbids the interception of  covered communications (that is, oral, wire, or  electronic) "except as otherwise specifically  provided in [Title III]." There are two relevant  sets of "otherwise specifically provid[ing]"  provisions. One is in subsection 2 of section  2511 and includes, as we have been emphasizing,  most conversations intercepted by (or with the  consent of) one of the parties. The other  exceptions in subsection 2 include pen registers,  switchboard operators, marine distress signals,  and foreign intelligence surveillance--a  heterogeneous array. In each instance the  excluded practice is described in its own  subsection together with any exceptions to the  exception, such as, in the case of section  2511(2)(d), for recording one's conversations for  a criminal or tortious purpose. Each of the  exception subsections in section 2511(2) is  complete and self-contained. But then there is  another set of provisions, sections 2516 to 2519,  defining and implementing the key exception for  interceptions pursuant to a warrant. It is in that cluster of sections that section 2517(3)  resides. Its location indicates that it is  limited to cases in which an otherwise unlawful  interception is lawful by virtue of having been  made pursuant to warrant; the surrounding  provisions make clear that the "authorization" to  which the subsection refers is judicial  authorization, not exemption. See secs. 2516,  2518(9); Gelbard v. United States, 408 U.S. 41,  46 (1972); United States v. Cunningham, 113 F.3d 289, 293 (1st Cir. 1997). To exempt is not to  authorize, though the effect may be the same. So  if, as in the case of most interceptions of  communications by or with the consent of a party,  the interception does not require a warrant to be  lawful, Title III does not restrict its use.

9
The courts (including our own) have repeatedly  held this in civil suits under Title III, Thomas  v. Pearl, 998 F.2d 447, 451-53 (7th Cir. 1993);  Griggs-Ryan v. Smith, 904 F.2d 112, 119 (1st Cir.  1990); Smith v. Cincinnati Post & Times-Star, 475 F.2d 740 (6th Cir. 1973) (per curiam); Meredith  v. Gavin, 446 F.2d 794, 799 (8th Cir. 1971)--  which the present case is. Section 2511 exempts  the conversations covered by it from the entirety  of Title III. "Since . . . the interception in  the case was not obtained in violation of the  Act, its subsequent use and disclosure was not a  violation of the Act." Id.; see also Obron  Atlantic Corp. v. Barr, 990 F.2d 861, 863-64 (6th  Cir. 1993); Leitman v. McAusland, 934 F.2d 46, 50  (4th Cir. 1991); United States v. Shields, 675 F.2d 1152, 1157 n. 2 (11th Cir. 1982); United  States v. Howell, 664 F.2d 101, 105 (5th Cir.  1981); United States v. Head, 586 F.2d 508, 513  (5th Cir. 1978). As the case last cited put it,  "18 U.S.C. sec. 2511(2)(d) exempts from the  operation of the entire chapter, of which section  2518 is a part, consensual recordings such as  made here." Id. (emphasis added). It is true that  some cases assume that section 2517(3) applies to  conversations exempted by sections 2511(2)(c) or  (d), but they are cases in which the court found  that the requirements of section 2517(3) had been  met, so there was no occasion to consider  whether, had they not been met, it would have  made any difference, since the conversations were  exempt. See United States v. Little, 753 F.2d 1420, 1435 (9th Cir. 1984); United States v.  Haimowitz, 725 F.2d 1561, 1582 (11th Cir. 1984);  United States v. Armocida, 515 F.2d 49, 52 (3d  Cir. 1975); United States v. Bishton, 463 F.2d 887, 892 (D.C. Cir. 1972) (per curiam); see also  United States v. Clegg, 509 F.2d 605, 612-13 (5th  Cir. 1975).

10
To subject interceptions made lawful by sections  2511(2) (c) and (d) to section 2517(3) would have  absurd consequences. It would mean that Whitacre  had violated the statute by turning his  recordings over to the FBI, since on the district  court's reading of that section the only  permissible disclosure of the contents of an  interception made lawful by sections 2511(2)(c)  or (d) is to play a tape of, or testify to, those  contents in court. Section 2517(3) reflects a  traditional sensitivity about wiretapping and  related methods of electronically eavesdropping  on other people's conversations. As is implicit  (and sometimes explicit) in the cases that hold  that such eavesdropping violates the Fourth  Amendment but that recording your own  conversations does not, there just is not the  same sensitivity about the latter practice. Title  III does not require a warrant for such recording  or regulate its use in any way. The matter has  been left to the states, except for the flat  prohibition of consensual recording for improper  purposes.

11
So if Whitacre's recordings were made lawful by  either of these subsections, Title III does not  restrict their use by the plaintiffs. It is clear  that they were. When the FBI agreed to Whitacre's  suggestion that he make the recordings in order  to gather evidence of price fixing, the FBI made  him a government informant, and in then making  the recordings in that role he was acting under  color of law within the meaning of section  2511(2)(c). Thomas v. Pearl, supra, 998 F.2d at  449-51;Berger v. Hanlon, 129 F.3d 505, 516 (9th  Cir. 1997), rev'd on other grounds, 526 U.S. 808,  relevant part of opinion reaffirmed, 188 F.3d 1155 (9th Cir. 1999); Obron Atlantic Corp. v.  Barr, supra, 990 F.2d at 864-65; United States v.  Haimowitz, supra, 725 F.2d at 1581-82; United  States v. Shields, supra, 675 F.2d at 1156-57.  (Obron and Haimowitz are factually  indistinguishable from the present case.)

12
And if this is wrong, it makes no difference; it  just puts Whitacre under subsection 2511(2)(d).  Desnick v. American Broadcasting Cos., 44 F.3d 1345, 1353 (7th Cir. 1995); United States v.  Zarnes, 33 F.3d 1454, 1469 (7th Cir. 1994);  United States v. Cassiere, 4 F.3d 1006, 1021 (1st  Cir. 1993); United States v. Dale, 991 F.2d 819,  841 (D.C. Cir. 1993). He would not be within the  exception to that subsection for recording for a  criminal or tortious purpose, because a purpose  of gathering evidence of a violation of law is  not criminal or tortious. E.g., United States v.  Zarnes, supra, 33 F.3d 1454, 1469 (7th Cir.  1994); By-Prod Corp. v. Armen-Berry Co., 668 F.2d 956, 959 (7th Cir. 1982); United States v. Dale,  supra, 991 F.2d at 841; United States v. Ruppel,  666 F.2d 261, 271 (5th Cir. 1982); 1 Carr, supra,  sec. 3.5(b), p. 3-112. It is the opposite. True,  his motive in making the recordings may have been  criminal or tortious (or more likely both)--to  elude detection of his fraud against ADM by  becoming a valued FBI informant and good-guy  whistleblower. But when the law speaks of  recording conversations with a criminal or  tortious purpose, it has, we think, regard for  the intended use of the recordings. There was  nothing of that here. It was not as if Whitacre  were going to use the recordings to blackmail  Randall or extort money from ADM. He was going to  give them to the FBI for use in evidence, a  clearly lawful purpose, as the cases we have  cited make clear. To repeat, so far as what was  recorded was concerned, the intent was to collect  evidence of antitrust violations, not evidence  that might be used for an improper purpose. The  recordings were no more unlawful than an arrest  would be by a police officer who wanted to  demonstrate zeal in the performance of his duties  in the hope that it would shield him from  prosecution for embezzling funds of the police  department.

13
The judgment of the district court is modified  to eliminate the restriction that the court  placed on the use of the recordings of the wire  communications by the plaintiffs, though without  prejudice to the judge's considering whether to  impose a protective order under Fed. R. Civ. P.  26(c). As so modified, the judgment is

14
Affirmed.

Notes:

1
 In re John Doe Trader Number One, 894 F.2d 240, 243 (7th Cir. 1990), Eschweiler was erroneously said to have been "reversed," albeit on other grounds, by Eschweiler v. United States, 877 F.2d 634 (7th Cir. 1989). Although the later case is related to the earlier one, it did not overrule the earlier one, or, indeed, criticize the earlier decision in any respect.