The opinion of the court was delivered by: HERLANDS
HERLANDS, District Judge:
This two-pronged motion by plaintiffs seeking a temporary injunction and a summary judgment for a permanent injunction presents a threshold issue concerning the Court's assumption of jurisdiction and a basic substantive issue concerning the constitutionality of certain state statutes and of the conduct of the defendant county and municipal officers in applying those statutes. The initial question is whether, in the particular circumstances of this case, the Court should invoke the doctrine of abstention and thus defer further proceedings or dismiss the complaint. The second question is whether the challenged provisions of three New York State statutes,
General Municipal Law § 103-b, Finance Law § 139-b and Public Authorities Law § 2602, are constitutional and whether the District Attorney of New York County and his assistants and the Director of Purchase of New York City, under color of enforcing these statutory provisions, have violated, are violating and are threatening to violate plaintiffs' constitutional right against self-incrimination.
For reasons expounded in this opinion, the Court has decided to abstain from assuming jurisdiction and not to pass on the merits of the substantive constitutional questions. However, in the process of deciding whether this is a proper case for the exercise of such discretion as it may justifiably employ in determining whether to abstain, the Court has considered the totality of relevant factors including certain aspects of the substantive questions to the extent that they impinge upon the problem of abstention. While the Court's range of focus for present limited purposes encompasses various features of the basic constitutional questions, the Court has not deemed it necessary to adjudicate those questions.
To place the issues in proper context, it is necessary to make a comprehensive statement of the nature of the proceedings and the parties' factual and legal contentions.
By order to show cause signed by District Judge Bryan on March 30, 1967, plaintiffs brought on a motion for a temporary restraining order, a preliminary injunction, a summary judgment and the convening of a three-judge statutory court under title 28 U.S.C. §§ 2281, 2284 and the General Rules of the United States District Court for the Southern District of New York, Rule 25. Judge Bryan refused to grant a temporary restraining order when he signed the order to show cause and made it returnable on April 4, 1967.
On April 4 and 11, 1967, District Judge Herlands heard argument on the motion. In a memorandum decision filed on April 14, 1967, Judge Herlands held that the proceedings "raise a substantial question as to the constitutionality" of the three state statutes and "that plaintiffs' application for an interlocutory and permanent injunction must be heard and determined by a district court of three judges. 28 U.S.C. §§ 2281, 2284." Plaintiffs' application for a temporary restraining order was denied "for the reason that the evidence does not support a specific finding that specified irreparable damage will result to these plaintiffs if a temporary restraining order is not granted. 28 U.S.C. § 2284(3)."
This three-judge court, having been duly designated, held a hearing on May 4, 1967.
On March 30, 1967, when plaintiffs obtained the order to show cause, they filed a complaint against the defendants herein: Frank S. Hogan, District Attorney of New York County, "and each and every assistant district attorney of New York County," and Samuel Adler. The defendant Adler is Director of Purchase of the City of New York.
The action is brought under title 42 U.S.C. § 1983, which relevantly provides that every person who, "under color of any statute, * * * of any State * * *, subjects, or causes to be subjected, any citizen of the United States * * * to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress."
The complaint alleges that the court has original jurisdiction by virtue of title 28 U.S.C. § 1343(3) and (4), which covers actions to "redress the deprivation, under color of any State law, statute, * * *, of any right, privilege or immunity secured by the Constitution of the United States" and to "secure equitable or other relief under any Act of Congress providing for the protection of civil rights."
Two claims are pleaded in the complaint. The first charges that defendants' actions and threatened actions "deprive under color of public office, each plaintiff of, and impair the exercise of, his right not to incriminate himself, which right is secured to him by the Fifth and Fourteenth Amendments to the United States Constitution and Article 1, Section 6 of the New York State Constitution." The second claim is that the three challenged New York State statutes "are unconstitutional under the Fifth and Fourteenth Amendments to the United States Constitution."
The five named plaintiffs are suing "on their own behalf and on behalf of all other persons similarly situated." The complaint contains the conventional allegations for a class action under Fed.R.Civ.P. 23.
The named plaintiffs are: Frohman Holland, Irving Holland, Robert Saunders, Bert Gilbert and Harvey Miller. The first three are respectively treasurer, vice-president and secretary of Holland Farms, Inc. and Hegeman Farms Corp.; Gilbert is president of Trinity Dairy Co., Inc.; and Miller is president of Queensboro Farm Products, Inc. The four above-named corporations are stated to be "engaged in the processing, sale and distribution of milk in the New York metropolitan area."
The class on whose behalf plaintiffs have brought this action is described in the complaint as consisting of "all persons who are officers or directors of any corporation, firm, partnership or other business entity which engages, or may engage in any transaction or has or may obtain a contract or award or has submitted or may submit a bid for milk or dairy goods, work or services with the State of New York, any municipal corporation or fire district therein, any public authority therein or any public department, agency or official thereof."
Subsequent to the filing of the complaint the following persons appeared in the action as members of the above class: Jack Sacks, secretary of Eastern Farms Products, Inc.; Richmond Kotcher and Norton Kotcher, respectively secretary and treasurer of Ferndale Farms, Inc.; David Gimpel, president of Gimpel Farms, Inc.; and Edward Brennan and Michael Cammarosano, officers of The Borden Company. The Attorney General of the State of New York, by stipulation, intervened as a party defendant.
We now detail the occurrences precipitating this litigation and the ensuing events, as described in the moving and opposing affidavits.
The Third March 1967 Grand Jury of the County of New York commenced an investigation to determine whether such crimes as conspiracy to prevent competitive bidding on public contracts, extortion, coercion and bribery had been committed in relation to the processing and distribution of milk and milk products during the past two or three years. The district attorney avers that he "has amassed considerable information which shows that a number of milk processing corporations have agreed to submit rigged milk bids to various governmental agencies. * * * that these corporations have taken milk which has been returned from stores as too old for sale and then repackaged it and delivered it to various governmental agencies including hospitals. * * * that these corporations and certain labor officials have agreed to coerce, threaten and harass the competitors of these milk corporations. These corporations and labor officials have agreed to raise and to fix milk prices. They have threatened and intimidated other milk dealers who balked at their scheme. That pursuant to that investigation over sixty witnesses have been called to testify before the Grand Jury. As a matter of caution, because of the wide spread corruption, practically all witnesses have been asked to sign waivers of immunity before testifying."
In the course of this inquiry, the district attorney called before the grand jury twenty-three individuals who are officers or directors of sixteen different milk processing and distributing corporations that sell and deliver milk and milk products to various governmental agencies.
In an early phase of the investigation, when its scope was broader than public contracts or bids, two witnesses were asked to sign a general waiver of immunity. Upon their refusal to do so, no action was taken by the district attorney with respect to any contracts their companies may have had with the City or State of New York.
However, when the inquiry was narrowed to the subject of municipal and state contracts and possible crimes committed in connection with them, the witnesses, including plaintiffs, were requested by the district attorney to sign a waiver containing the following language: "That pursuant to Section 103b of the General Municipal Law I hereby waive immunity against any subsequent criminal prosecution for any crimes which my testimony before this Grand Jury may disclose." None of the witnesses signed the waiver.
The district attorney argues that the explicit language of the proffered waiver and the ample opportunity of each witness to consult his attorney - who accompanied him to the grand jury anteroom - both before and during his grand jury appearance with respect to the waiver alerted each witness to the fact that he was going to be interrogated about municipal and state milk contracts.
The plaintiffs claim that, assuming arguendo the constitutionality of General Municipal Law, § 103-b, the district attorney has applied the statute in an unconstitutional manner by failing to offer them a waiver of immunity limited to specific transactions and contracts with the city and state; and by threatening them that, if they refused to sign a waiver of immunity, they and the corporations of which they were officers or directors would be barred from doing any business with the City and State of New York for a period of five years.
The relevant portion of the minutes of the Third March 1967 Grand Jury made available to us for purposes of this case, pursuant to an appropriate state court order, discloses that each of the five named plaintiffs (who appeared before the grand jury on March 21, 1967), eight other officers and directors of milk companies (who appeared before the grand jury on the same day), two other similar witnesses (who appeared before the grand jury on March 23, 1967), four other similar witnesses (who appeared before the grand jury on dates not indicated) were told by the district attorney that the grand jury was conducting an investigation to determine whether the crimes of conspiracy, coercion, extortion, bribery of a labor union representative, bribery of a public official and bid-rigging, among other crimes, have been committed in relation to the processing and distribution of milk in the New York City area during the past two or three years; and that, if the witness failed to sign a waiver of immunity pursuant to General Municipal Law § 103-b, he and any firm that he represents might be disqualified from doing business with the City and State of New York for a period of five years.
The grand jury minutes also disclose that, in the case of a similar witness who appeared before the grand jury some unspecified time after March 30, 1967 (the date when the action herein was commenced), he was told by the district attorney that the grand jury was investigating the crimes of conspiracy to rig bids on public contracts, extortion, bribery and other violations of the Penal Law relating to public contracts for the sale and purchase of milk products by the City of New York and other government agencies; and that the witness's testimony was desired in relation to that inquiry. In the case of two similar witnesses who appeared before the grand jury on April 13, 1967, they were told by the district attorney that their testimony was sought in connection with the grand jury's investigation into such crimes as conspiracy to prevent competitive bidding on public contracts, bribery, extortion, and other violations of the Penal Law in relation to public contracts that the company of which they were officers had with the City and State of New York.
Following the above-mentioned witnesses' refusal to sign waivers of immunity, the district attorney wrote a letter, dated March 27, 1967, to the Mayor of the City of New York, Honorable John V. Lindsay, reading:
"Re: People v. John Doe, et al
The Third March Grand Jury of this county is presently conducting an investigation to determine whether violations of the penal law have been committed in relation to the processing and distribution of milk and milk products in the New York City Metropolitan area during the past two or three years.
In the course of this investigation, this office has subpoenaed a number of milk dealers who have contracts with City agencies. Pursuant to Section 103-b of the General Municipal Law, the standard contract of these agencies requires that contractors doing business with the various City departments sign waivers of immunity before the Grand Jury when called to testify concerning their transactions with the City.
Under Section 103-b this office is required to advise you that the following witnesses have refused to sign, and testify under, waivers of immunity before the New York County Grand Jury:
* * * [Here follow the names of eighteen persons, their corporate positions in fifteen different milk companies, ...