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UNITED STATES v. IBM

December 8, 1975;

UNITED STATES OF AMERICA, Plaintiff,
v.
INTERNATIONAL BUSINESS MACHINES CORPORATION, Defendant



The opinion of the court was delivered by: EDELSTEIN

MEMORANDUM

 EDELSTEIN, CHIEF JUDGE:

 As stated by this court on the record, Tr. at 8516, the within motion is denied. The essential arguments raised by Mr. Kaufman are substantially identical to those raised by one Frederic G. Withington in a motion to quash a subpoena directing him to appear and testify as an expert on behalf of the United States in this case. In a memorandum decision entered on December 4, 1975, the court denied Mr. Withington's motion after addressing the relevant questions and concluding, first, that this court could compel Mr. Withington to testify, as confirmed by the Second Circuit in Carter-Wallace, Inc. v. Otte, 474 F.2d 529, 536 (2d Cir. 1972), cert. denied, 412 U.S. 929, 37 L. Ed. 2d 156, 93 S. Ct. 2753 (1973), and, second, that such authority should be exercised in that case. The reasons and principles set forth in the court's memorandum denying Mr. Withington's motion requires the same result with respect to the instant application.

 Mr. Kaufman's assertion that the "showing" required by the Second Circuit in Carter-Wallace as a condition to using prior recorded expert testimony ["applies] a fortiori to the expert newly summoned against his will," Memorandum of Law in Support of Motion to Quash and Vacate Subpoena at 9, is so specious as not to warrant extended discussion. It is enough to quote in full the language in Carter-Wallace to which Mr. Kaufman refers and which he partially reproduces in his memorandum. Judge Friendly stated:

 
Moreover, even the unavailability of a particular expert witness should not without more allow the use of his prior testimony in a second action. It must be recognized that the general preference of the federal rules, as expressed in F.R.Civ.P. 43(a), is for oral testimony so that there will be an opportunity for live cross-examination and observation of the demeanor of the witness. While the use of previous testimony is a well-established exception to this rule, it is an exception based on the necessity of using the prior testimony when the alternative is loss of that testimony entirely. See 5 Wigmore, supra, § 1402, at 148. When the ordinary witness is unavailable, his unique knowledge of the facts will be lost unless the use of his prior testimony is allowed. But the expert witness generally has no knowledge of the facts of the case. Instead, he is called upon to express a professional opinion upon the facts as they are presented to him, often expressing his opinions in the form of answers to hypothetical questions. Thus, even if one particular expert is unavailable, there is no need to use his previous testimony to prevent the loss of evidence, because there will usually be other experts available to give similar testimony orally. It seems to us, therefore, that before the former testimony of an expert witness can be used, there should be some showing not only that the witness is unavailable, but that no other expert of similar qualifications is available or that the unavailable expert has some unique testimony to contribute.

 Id. (emphasis supplied). In light of this language, it is clear beyond doubt that the "showing" Judge Friendly required was one prompted by the concerns inherent in the use of prior recorded testimony, concerns which are totally distinct from those involved in compelling an expert to assume the stand where he would be available for direct and cross-examination.

 Mr. Kaufman's assertions with regard to the new Federal Rules of Evidence similarly fail to support his attempt to quash plaintiff's subpoena. After stating that "there is no Rule which deals directly with a Party's right to obtain the testimony of experts," Memorandum of Law in Support of Motion to Quash and Vacate Subpoena at 10, Mr. Kaufman refers the court to Rule 706(a) which provides a procedure for the appointment by the court of experts. While it is true, as Mr. Kaufman points out, that that Rule states that "[an] expert shall not be appointed by the court unless he consents to act," Mr. Kaufman's reliance on that statement is misplaced. First, the "appointment" envisioned by Rule 706(a) contemplates requiring the expert to perform significant duties, such as preparing "findings," in addition to or in lieu of testifying at the trial. Since the court in Carter-Wallace would not permit such additional duties to be imposed on an unwilling expert, 474 F.2d at 536, the requirement of consent contained in Rule 706(a) is not inconsistent with the ruling by the Second Circuit in Carter-Wallace. Second, as plaintiff's answering memorandum indicates (at 4), Mr. Kaufman fails to acknowledge subdivision (d) of Rule 706 which at least suggests that the requirement of consent in subdivision (a) does not extend to a party's attempt to subpoena an unwilling expert. Subdivision (d) provides:

 
Parties' experts of own selection. Nothing in this rule [706] limits the parties in calling expert witnesses of their own selection.

 Like Mr. Withington, Mr. Kaufman asserts that compelling him to testify for the United States would create a conflict of interest since his employer, Coopers & Lybrand, is performing certain unspecified services for IBM. In the preliminary statement to his memorandum of law, Mr. Kaufman explains that in December of 1974 Coopers & Lybrand agreed to perform services in preparation of IBM's defense in a separate private action, California Computer Products, Inc. v. IBM, Civil Action No. 73-2331 (N.D. Cal.) and that, thereafter, Coopers & Lybrand was engaged by Cravath, Swaine & Moore, IBM's counsel in this case, "to perform certain services in connection with the preparation of IBM's defense in the present action." Kaufman memorandum, at 3. Further, it is asserted that Coopers & Lybrand "has been negotiating with IBM about a possible engagement to perform certain consulting services on behalf of an IBM subsidiary in a matter unrelated to this action." Id. (emphasis supplied).

 In evaluating Mr. Kaufman's claim, the court must consider not only the value of his testimony to this complex and extraordinary case, see infra, but also several influential factors revealed by the papers submitted on this motion. First, apart from a general familiarity due to his supervisory capacity as National Director of Management Consulting Services, Mr. Kaufman concedes that he has "no direct personal involvement" in the work performed by Coopers & Lybrand for IBM in its defense in this or the California case. Kaufman affidavit, at 3. Moreover, and of particular significance, IBM and its counsel, to whom Mr. Kaufman asserts the "duty of loyalty" is owed, have indicated both to Mr. Kaufman and to this court that they do not "wish to assert [in their] behalf that Mr. Kaufman is in any way precluded from testifying on behalf of the Government because of the relationship with IBM and its counsel which Coopers & Lybrand has undertaken." Letter from Thomas D. Barr (counsel for IBM) to Powell Pierpoint (counsel for Kaufman), dated September 10, 1975 (filed December 8, 1975). Indeed, as IBM points out in that letter, a copy of which is annexed hereto, in response to plaintiff's motion to add Mr. Kaufman's name to its witness list defendant filed an affidavit consenting to the entry of such an order.

 In addition to these factors, Mr. Kaufman's allegations as to a conflict of interest must be weighed against two representations contained in plaintiff's answering memorandum of law. First, plaintiff asserts that Mr. Kaufman will be called to testify "concerning his observations and prior opinions expressed during the period 1960 through 1972." Memorandum in Opposition to Motion to Quash and Vacate the Subpoena Served upon Felix Kaufman, at 5. This time frame, of course, terminates before Mr. Kaufman's employer undertook for IBM whatever services are referred to in the Kaufman affidavit. Additionally, plaintiff asks the court to note that:

 
Coopers & Lybrand has in the past performed a significant amount of consulting services for the Department of Justice and other Government agencies . . . . The 'duty of loyalty' expressed by Dr. Kaufman and implied by Mr. Amnowitz in their affidavits did not deter Coopers & Lybrand from being retained by IBM counsel to assist in the defense of this case in spite of its past relationships with the Government, and one month after Dr. Kaufman was subpoenaed to appear as a Government witness. This 'duty of loyalty' cannot and should not preclude Dr. Kaufman's testimony concerning prior opinions formed as an impartial observer of the data processing industry.

 Id. at 5-6.

 In light of these factors, the court cannot accept Mr. Kaufman's allegations with regard to an alleged conflict of interest -- a "conflict" that ...


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