Court Requires DOJ To Disclose Audio Recordings Obtained In Criminal Antitrust Investigation To Civil Plaintiffs

Judge Paul Borman, District Judge for the Eastern District of Michigan, recently ordered the Department of Justice ("DOJ") to produce tape recordings to the direct purchaser plaintiffs in the In re Packaged Ice multidistrict price-fixing litigation. By rejecting DOJ's claims of sovereign immunity, privilege, and work product, the decision may signal a growing willingness to permit disclosure in subsequent civil actions of otherwise confidential investigative materials.

Background and Ruling

In re Packaged Ice Antitrust Litig., No. 08-md-01952 (E.D. Mich. May 10, 2011), involves an alleged conspiracy among ice companies to maintain high packaged ice prices. In 2004, DOJ began a criminal investigation into the alleged anticompetitive conduct of major packaged ice players. During the course of the investigation, DOJ, with the cooperation of certain individuals, obtained taped recordings of conversations with persons of interest. As part of a separate cooperation agreement with one of the defendants, the direct purchaser plaintiffs learned of these taped recordings and, following the termination of DOJ's investigation, served a subpoena on DOJ seeking the recordings and transcripts. Although the cooperating witnesses (including employees of the cooperating companies) did not oppose disclosure, DOJ objected to the subpoena on grounds of sovereign immunity, the investigatory files privilege, the law enforcement privilege, and work product protection.

Judge Borman rejected DOJ's sovereign immunity argument. According to Judge Borman, the circuits are split on whether sovereign immunity can bar a federal court from enforcing a federal subpoena against a non-party federal agency. Judge Borman observed that the Fourth and Eleventh Circuits have agreed with DOJ's argument that sovereign immunity applies absent a waiver. (p. 4). These courts held that "a proceeding under the APA, and the APA's 'arbitrary and capricious' standard of review, is the only avenue of relief." (Id.). However, the Ninth and D.C. Circuits have ruled that sovereign immunity does not bar a federal court from enforcing a federal subpoena against a non-party federal agency subject to the discovery limitations in the Federal Rules of Civil Procedure. (pp. 4-5). Judge Borman concluded that, although the Sixth Circuit has not expressly decided the issue, he would join the courts "that have concluded that Federal Rule of Civil Procedure 45 and various available privilege rules provide...

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