Antitrust Law Daily Wrap Up, ANTITRUST—EDNY: Grand Jury Testimony of Witnesses to Alleged Air Cargo Price Fix Disclosed for Potential Use in Private Suit, (Oct 25, 2012)

By E. Darius Sturmer, J.D.

At the request of a putative consumer class pursuing antitrust claims against air cargo shippers, the federal district court in Brooklyn, New York, ordered disclosure of the grand jury testimony of two witnesses who had testified during the federal government’s investigation of alleged price fixing in the industry (In re Air Cargo Shipping Services Antitrust Litigation, October 24, 2012, Pohorelsky, V.). Disclosure was limited to “attorney eyes only,” however, to protect the witnesses from retaliation within the industry, in which both remain employed.

The plaintiffs sought to unseal the testimony after an agreement with the government—whereby government attorneys reviewed the grand jury transcripts at issue to determine whether any portions might be appropriate for disclosure under Federal Rule of Criminal Procedure 6(e)(3)(E)(i)—yielded overlaps between portions of the grand jury testimony and excerpts of the transcripts of the depositions given by the witnesses for the private litigation.

The court concluded that certain portions of the grand jury transcripts may well serve to refresh the witnesses’ recollection or to impeach them. An assertion by the defendants that the plaintiffs’ failure to show a compelling necessity for the information rendered disclosure inappropriate was rejected. All that was required, in the court’s view, was a showing that the information was needed to avoid a possible injustice. “Given the limited volume of the grand jury testimony at issue and the fact that the government is not asserting that continued grand jury secrecy should trump the plaintiffs’ need for that testimony,” the court stated, this standard was met and disclosure was therefore warranted.

A contention by the witnesses and defendants that the disclosure should await trial, “when it would be clear whether the witnesses will actually be called to testify,” was denied by the court. The circumstances of the case counseled in favor of making the disclosure presently instead of on the eve of trial. As no trial date had been set, and none was likely to be set anytime soon, it was not at all clear whether the witnesses would be available to testify at trial or even subject to the court’s subpoena power when the trial was held, the court noted. Thus, because the plaintiffs might have to rely on the witnesses’ deposition testimony as evidence, they “should … be given the opportunity now to convince the court that their depositions should be reopened to explore matters disclosed in the grand jury testimony.” Moreover, the very question of whether they would be called to testify could be affected by the plaintiffs’ assessment of the grand jury testimony disclosed, the court concluded.

The case is No. 06-MD-1775.

Besrat J. Gebrewold (Cohen Milstein Sellers Toll PLLC) for plaintiffs. Gary A. MacDonald (Skadden, Arps, Slate, Meagher & Flom LLP) for defendants.

Cases: Antitrust NewYorkNews