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IN RE EMPRISE CORP.

April 20, 1972

Matter of Petition of Emprise Corp.

Henderson, D. J.


The opinion of the court was delivered by: HENDERSON

HENDERSON, D. J.

On December 13, 1971, the then Acting Assistant Attorney General in charge of the Antitrust Division of the Department of Justice, Walker B. Comegys, issued a civil investigative demand (hereinafter "the Demand") to Emprise Corporation (hereinafter "Emprise") pursuant to 15 U.S.C. § 1312(a) requiring the production by Emprise of certain documents at a stated time and place.

 On January 5, 1972, Emprise filed a petition for an order either setting aside or modifying the Demand or, in the alternative, for an order granting Emprise leave to serve upon the Department of Justice certain interrogatories for the purpose of determining the propriety of the Demand.

 On January 19, 1972, the Department of Justice filed a petition for an order for enforcement of the Demand. On January 24, 1972, a hearing was held on both petitions.

 In support of its petition for an order setting aside or modifying the civil investigation, Emprise alleges that the Demand was prompted by a discriminatory or improper investigation; that the conduct claimed by the government in its Demand does not violate federal antitrust laws; that Emprise may not be served on behalf of its predecessor; that some documents demanded are confidential in nature and irrelevant, other documents are not material or required by the investigation and still others should not properly be demanded.

 For the reasons set forth below, the petition of Emprise for an order setting aside or modifying the Demand is denied. Their petition for leave to serve interrogatories upon the Department of Justice is also denied. The government's motion for an order of enforcement of the Demand is granted.

 Emprise claims that for the past two years it has been unjustly and unfairly subjected to legislative and political harassment by the Honorable Sam Steiger, Congressman from the Third Congressional District of Arizona. Emprise further claims that it is presently involved in civil antitrust litigation with individuals and corporations whose residences and/or offices are located in and around Chicago, from where the Demand issued. Accordingly, they assert that the Demand may have been prompted by or in aid of an inquiry of a legislative or political nature, being pursued by an individual member of Congress, or that it stems from or was instigated by a litigant with interests adverse to Emprise.

 In response, the government claims that in June 1971 an informant, who is an official of a sports arena that has loans and concession contracts with Emprise, advised the Antitrust Division of the Department of Justice that a subsidiary of Emprise had made loans to owners of sports arenas with the understanding that the subsidiary would receive exclusive concession rights under long term contracts. At that point the government claims that it began a routine preliminary inquiry into this matter with a view toward possible violation of the antitrust laws. Thereafter, a letter was sent to Emprise by the Antitrust Division, advising of the inquiry and requesting Emprise to voluntarily furnish certain information.

 In September and November 1971, articles appeared in the Chicago Tribune newspaper indicating that Emprise had made low interest loans in exchange for concession rights. In addition to citing the testimony of the general manager of the Montreal Expos Baseball Team, the articles contained additional information concerning the extent of Emprise involvement with other concession contracts in sport arenas throughout the country.

 After the information requested was not voluntarily supplied by Emprise, the Demand in question was issued by the Acting Assistant Attorney General, Walker B. Comegys.

 The government has previously submitted a sworn affidavit from Mr. Comegys wherein he states that the investigation of Emprise is being carried out solely as a result of an independent decision of the Department of Justice and specifically denies that the Demand was issued in aid of any inquiry of a legislative or political nature, or in aid of any private litigant, or any other improper purpose.

 It is noted initially that the investigative powers given by Congress to various government agencies is not unconditional. The government may not subvert the use of its investigative power by reason of political influence or other improper motives. Chattanooga Pharmaceutical Assn. v. United States Department of Justice, 358 F.2d 864 (6th Cir. 1966). Emprise does not contend that the Demand was in fact motivated by an improper purpose. They do insist on the opportunity to address limited interrogatories to the Antitrust Division to determine whether or not such an improper purpose exists. However, in view of the affidavit of Mr. Comegys, it is unclear what purpose would be served by such interrogatories. He has categorically denied that the Demand was issued for the purpose of aiding any legislative or political inquiry or private litigation.

 The only case cited by the parties or found by this court wherein interrogatories of the type proposed by Emprise were permitted to be served upon the Department of Justice is The Matter of the Petition of Cleveland Trust Co., C 68-855 (N.D. Ohio, March 4, 1969). The Assistant Attorney General in charge of the Antitrust Division also submitted an affidavit in that case. That affidavit, however, simply recited that the investigation of Cleveland Trust Company was instituted as a result of an independent decision of the Department of Justice. It did not address itself to whether the investigation was either in aid of a legislative or political inquiry or some other improper purpose. To that extent, there may have been a question of fact presented for resolution and accordingly that case is distinguishable from the present petition. Whatever reasons the court in the Cleveland Trust Case, supra, had for permitting those interrogatories to the Department of Justice are not presented in the petition of Emprise. The question of improper motives has been answered by Mr. Comegys' affidavit and, accordingly, the interrogatories are neither necessary nor appropriate. See, American Pharmaceutical v. United States Department of Justice, Antitrust Division, and Richard W. McLaren, 1971 TRADE CASES 73,767; Michigan State Pharmaceutical Assn. v. United States Department of Justice, Antitrust Division, 344 F. Supp. 9 (E.D. Mich. 1971).

 As to the identity of the initial informant, the government claims that this is privileged information and that there is nothing alleged in the petition of Emprise which would warrant such disclosure. This court agrees with that conclusion. Roviaro v. ...


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