Monday, June 06, 2011

U.S. Urges High Court Not to Review Decision Enforcing Subpoenas in Antitrust Investigation

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

The U.S. Supreme Court should not review a decision of the U.S. Court of Appeals in San Francisco (CCH 2011-1 Trade Cases 77,467) enforcing grand jury subpoenas served on law firms in an antitrust investigation, the Department of Justice contended in a May 26 brief filed with the Court. The subpoenas sought non-privileged, pre-existing corporate records of the law firms’ clients.

The law firms had petitioned the Court to review the appellate court's decision, applying a per se rule enforcing a grand jury subpoena notwithstanding a civil protective order, and allowing prosecutors to obtain discovery materials from a parallel civil action, regardless of any countervailing considerations.

The underlying civil suits were filed by private plaintiffs against the law firms' clients—foreign producers of thin-film transistor-liquid crystal display panels (TFT-LCD)—soon after the government's investigation into alleged price fixing in the TFT-LCD industry became public.

The private litigation resulted in the production by the civil defendants of documents originating outside the United States. The Department of Justice served grand jury subpoenas on four law firms, seeking foreign-origin documents and deposition transcriptsfrom the class actions. A federal district court quashed certain subpoenas, and the Justice Department appealed.

“By a chance of litigation, the documents have been moved from outside the grasp of the grand jury to within its grasp,” the appellate court explained. “No authority forbids the government from closing its grip on what lies within the jurisdiction of the grand jury.”

The appellate court noted that the government had not engaged in any bad faith tactics, and the law firms did not claim that the documents were privileged. The per se rule of enforcement of grand jury subpoenas applied.

In response to the law firms' contention that review of the appellate court decision would resolve a split among the federal circuit courts on the issue of grand jury subpoena enforcement, the government argued that “no other court of appeals would have decided this case differently.”

The government conceded that “the circuits have adopted somewhat different positions on when grand jury subpoenas may be used to obtain materials covered by a civil protective order.” However, it noted that the law firms “significantly overstate the difference between the rule applied in the Fourth, Ninth, and Eleventh Circuits (which petitioners characterize as a “per se” approach) and the rule applied by the First and Third Circuits, which apply a rebuttable presumption that a grand jury subpoena should be enforced even when there is a civil protective order.”

The government also suggested that review was unnecessary because the question of how and when grand jury subpoenas can require production of material covered by civil protective orders rarely arises.

In addition, the government took issue with one law firm's argument that the subpoenas were unreasonable or oppressive because they were directed to lawyers. There was no risk posed to the attorney-client relationship, according to the government's brief. The subpoenas sought information that was produced in discovery, not information bearing on the representation of a client.

The petitions are White & Case LLP v. U.S., Dkt. No. 10-1147, filed February 25, 2011, and Nossaman LLP, v. U.S., Dkt. No. 10-1176, filed March 4, 2011

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