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United States v. GAF Corp.

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT


decided and filed: March 15, 1979.

UNITED STATES OF AMERICA, PETITIONER-APPELLANT,
v.
GAF CORPORATION, RESPONDENT-APPELLEE, EASTMAN KODAK COMPANY, INTERVENOR-APPELLEE

Author: Gurfein

Before MULLIGAN and GURFEIN, Circuit Judges, and WEINSTEIN, District Judge.*fn*

On Petition for Rehearing

GURFEIN, Circuit Judge :

Eastman Kodak ("Kodak") petitions this court, pursuant to Rule 40 F.R. App. P., for rehearing of certain limited aspects of our opinion of February 9, 1979 (slip op. 1299). We grant the petition and modify our opinion in certain respects.

The petition does not contest the statutory construction of the Antitrust Civil Process Act in the majority opinion. It suggests, rather, that since Judge Owen did not reach any other question after he held the CID to be invalid, this court should not have given its views on the issues remaining. It also suggests that a panel opinion by Judge Mansfield, concurred in by Judges Median and Meskill, Martindell v. ITT, No. 78-6074, slip op. 1317 (Feb. 14, 1979) would, in any event, require a different conclusion. In short, the petition requests that we limit our opinion to the issue of the Government's power to seek by a CID documents received by a third party in discovery and that we remand to the District Court's general discretion the determination whether, and if so to what extent, the existing protective order should be amended. The suggestion is made explicitly that ITT, supra, is contrary to our view on the continuation of the protective order.

The ITT panel did not deal with a CID authorized by a statute. Indeed, the standing of the Government was ambiguous enough to require several pages of discussion. Moreover, what was sought by the Government in ITT was the deposition testimony of witnesses on a matter delicate enough to have counselled the invoking of a claim of constitutional privilege against self-incrimination, which claim of privilege was foregone on an explicit agreement between the parties sanctioned by a protective order for limited use of that testimony.

The key to the distinction in Judge Mansfield's characteristically careful opinion is the following:

Slip op. 1326 n.6 [Emphasis added].*fn1

We noted in our opinion, of course, that the CID power was granted to the Government in antitrust cases by Congress after the GAF opinion cited.

In this case for the first time, we deal with a statutory subpoena. We do not deal with testimony given for limited use, but with documents concededly available to the Government by original subpoena to Kodak plus an analysis by its civil adversary's lawyers. Our opinion does not give the Government access to anything specific without more.

The lifting of the protective order would simply permit, in the district judge's discretion, the legal analysis memoranda, which discuss documents received in discovery, to be turned over to the Government pursuant to what we have determined to be a valid CID.

We issued an opinion which, we believe, balanced the equities, that is, the new statutory mandate supported by congressional policy in antitrust matters and the existence of a protective order.

We do not agree with Kodak that our opinion "would reward GAF and the government for studiously avoiding the proper procedure of presenting the issue in the first instance to the court that entered the protective order." We are aware of no effort on the part of Kodak to have the matter referred by Judge Owen to the judge presiding over the civil action. Moreover, in the absence of precedent, the enforcement action is an independent matter and, apparently, by the rules of the Southern District, was not considered a related case to be handled by the judge in the civil litigation. We have tried to remedy that.

The Government has won only a very limited victory, since we have ordered the matter remanded with a strong suggestion that it be handled by the judge in charge of the civil litigation and, hence, of the protective order (as Kodak now belatedly requests).

We have not only made that suggestion, which we are reasonably certain will be honored by Chief Judge Edelstein and the District Court, but we have given a clear mandate to the District Court "to superimpose upon any enforcement orders such protective orders as may be required to safeguard the interests of the parties in the particular circumstances." Slip op. at 1312.

Accordingly, we grant rehearing, and upon rehearing, grant Kodak's request to excise footnote 11.*fn2

We also, for clarity, amend the first sentence on page 1312 of the slip opinion, as requested, to read: "A list of all Kodak documents turned over to the Government by GAF, or referred to in GAF memoranda turned over to the Government, should be given to Kodak."

The petition is, in all other respects, denied.

MULLIGAN, Circuit Judge, dissenting:

I dissent for the reasons previously given in my opinion of February 9, 1979, slip op. at 1312.


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