No. 10-1147APR20 2011 ~

,upreme eurt ef [n tel ,tatee:

WHITE ~ CASE LLP,Petitioner,

V.

UNITED STATES OF AMERICA,Respondent.

On Petition for a Writ of Certiorari to theUnited States Court of Appeals

for the Ninth Circuit

BRIEF OF AMICI CURIAE CHAMBER OFCOM2VIERCE OF THE UNITED STATES OFAMERICA AND DRI--THE VOICE OF THE

DEFENSE BAR IN SUPPORT OF PETITIONER

ELLEN K. REISMANARNOLD & PORTER LLP777 S. Figueroa Street44th FloorLos Angeles, CA 90017(213) 243-4000

LISA S. BLATTCounsel of Record

R. REEVES ANDERSONARNOLD & PORTER LLP555 12th Street, NWWashington, DC 20004(202) 942-5000lisa.blatt@aporter.com

Counsel for Amici Curiae

[Additional Counsel Listed On Inside Cover]

WILSON-EPES PRINTING Co., INC. - (202) 789-0096 - WASHINGTON, D. C. 20002

ROBIN S. CONRADNATIONAL CHAMBER

LITIGATION CENTER1615 H Street, NWWashington, DC 20062(202) 463-5337

Counsel for Chamber ofCommerce of the UnitedStates of America

R. MATTHEW CAIRNSGALLAGHER CALLAHAN

& GARTRELL PC214 North Main StreetConcord, NH 03301(603) 545-3622

Counsel for DRI--The Voiceof the Defense Bar

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ................................ ii

INTEREST OF AMICI CURIAE ........................ 1

INTRODUCTION ................................................ 2

ARGUMENT ........................................................ 4

I. THIS COURT’S REVIEW IS NEEDEDTO CORRECT THE DECISION BELOWAND RESOLVE A THREE-WAY CIR-CUIT SPLIT .............................................. 4

A. Plaintiffs Can Exploit The NinthCircuit’s Per Se Rule To LeverageSpeedy And Sizable Settlements InNon-Meritorious Cases ........................ 4

B. The Existing Circuit Split Incenti-vizes Forum Shopping .........................9

II. THIS CASE HAS BROAD IMPLICA-TIONS FOR NUMEROUS AREAS OFLAW ...........................................................11

CONCLUSION ....................................................12

(i)

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TABLE OF AUTHORITIES

CASES

Baxter v. Palmigiano,425 U.S. 308 (1976) ......................................

Blue Chip Stamps v. Manor Drug Stores,421 U.S. 723 (1975) ......................................

Degen v. United States,517 U.S. 820 (1996) ......................................

In re Grand Jury Subpoena,836 F.2d 1468 (4th Cir. 1998) ......................

Jerman v. Carlisle, McNellie, Rini, Kramer& Ulrich LPA, 130 S. Ct. 1605 (2010) .........

Lockheed Martin Corp. v. L-3 Commc’nsIntegrated Sys., L.P., No. 05-CV-902, 2010WL 1891779 (N.D. Ga. Mar. 31, 2010) ........

Mitchell v. United States,526 U.S. 314 (1999) ......................................

Roadway Express, Inc. v. Piper,447 U.S. 752 (1980) ......................................

Seattle Times Co. v. Rhinehart,467 U.S. 20 (1984) ........................................

Stoneridge Inv. Partners, LLC v. Scientific-Atlanta, Inc., 552 U.S. 148 (2008) ................

United States v. Kordel,397 U.S. 1 (1970) ..........................................

FEDERAL STATUTES AND RULES

15 U.S.C. § 15 ...............................................

Fed. R. Civ. P. 26(b)(1) .................................

Fed. R. Civ. P. 26(c) ......................................

Fed. R. Civ. P. 37(b)(2) .................................

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TABLE OF AUTHORITIES--Continued

OTHER AUTHORITIES Page(s)

Antitrust Damage Allocation: HearingsBefore the Subcomm. on Monopolies andCommercial Law of the H. Comm. on theJudiciary, 97th Cong. 7 (1982) .................7

Antitrust Equal Enforcement Act of 1979:Hearings on S. 1468 Before the Subcomm.on Antitrust, Monopoly, and BusinessRights of the Senate Comm. on theJudiciary, 96th Cong. 85 (1979) ...............7-8

Howard M. Erichson, Coattail Class Actions:Reflections on Microsoft, Tobacco, andthe Mixing of Public and Private Lawyer-ing in Mass Litigation, 34 U.C. Davis L.Rev. 1 (2000) ..............................................11

Donald W. Hawthorne, Recent Trends inFederal Antitrust Class Action Cases, 24Antitrust 58 (2010) ...................................10, 11

Robert H. Lande & Joshua P. Davis, Bene-fits From Private Antitrust Cases: AnAnalysis of Forty Cases, 42 U.S.F.L.Rev. 879 (2008) ..........................................11

Reply Brief for the United States, FCC v.AT&T Inc., 131 S. Ct. 1177 (2011) (No.09-1279), 2010 WL 3019690 .....................10

Mike Scarcella, DOJ Defending GrandJury Subpoenas in Trade Secrets TheftInvestigation, The Blog of LegalTimes,Mar. 22, 2011 ............................................ 9

Mike Scarcella, DOJ Presses Law Firms inLCD Probe, Nat’l L. J., May 10, 2010 ......12

Blank Page

INTEREST OF AMICI CURIAE 1

The Chamber of Commerce of the United Statesof America (the "Chamber") is the world’s largestbusiness federation. It directly represents 300,000members and indirectly represents the interests ofover 3 million business, trade, and professionalorganizations of every size, in every business sector,and from every region of the country. A centralfunction of the Chamber is to represent the interestsof its members in important matters before thecourts, Congress, and the Executive Branch. To thatend, the Chamber files briefs as amicus curiae incases that raise issues of vital concern to the Nation’sbusiness community.

DRI--the Voice of the Defense Bar ("DRI") is aninternational organization comprised of more than23,000 civil defense attorneys. DRI strives toimprove the civil justice system by addressing issuesof importance to the civil defense bar. For more thana half-century, DRI has worked to make the civiljustice system more fair, efficient, and--where nationalissues are involved--consistent. DRI promotes theseobjectives by participating as amicus curiae in casesthat have direct and significant impacts on DRI’smembers and their clients.

1 NO counsel for a party authored this brief in whole or inpart, and no party or counsel for a party made a monetary con-tribution intended to fund the preparation or submission of this

brief. No one other than amici curiae, their members, or amici’scounsel made a monetary contribution to the preparation orsubmission of this brief. Letters from the parties consenting tothe filing of this brief have been filed with the Clerk of theCourt. Counsel of record for all parties received notice at leastten days prior to the due date of amici curiae’s intention to filethis brief.

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Two factors prompt amici’s participation in thiscase. First, the per se rule adopted in the NinthCircuit’s decision places defendants in the "untenableposition" of choosing between the risk of adverseconsequences in civil litigation and the risk of self-incrimination in a parallel criminal investigation.App. 5a. Plaintiffs can exploit this dilemma asleverage to extract speedy and sizable settlementsunwarranted by the merits of their cases. Second,the express three-way circuit split, which spans sixcircuits, creates inconsistent laws nationwide andinevitably leads to predatory forum shopping. Theimplications of the Ninth Circuit’s ruling--and thecircuit split it exacerbates--stretch far beyondantitrust litigation.

INTRODUCTIONThis dispute arises out of concurrent civil litigation

and grand jury proceedings against domestic andforeign manufacturers of thin-film transistor, liquidcrystal display panels (TFT-LCDs) for alleged price-fixing. Rather than stay the civil action pendingresolution of the criminal investigation, the districtcourt below ordered the civil defendants (some ofwhom have not been indicted in the ongoing criminalinvestigation) to produce discovery to the civilplaintiffs. Based in part on the government’s argu-ment that proceeding with civil discovery could placedefendants in the "untenable position" of having tochoose between fully defending the civil action andmaintaining their Fi~th Amendment right againstself-incrimination, the district court entered an orderspecifically prohibiting the government from obtainingthe civil discovery for use as evidence in the grandjury investigation. App. 5a-6a. It was in relianceupon this discovery order and the accompanying civil

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protective order that defendants produced significantinformation from outside the United States.

Two years later, the government reversed courseand issued the grand jury subpoenas at issue here.Those subpoenas sought all discovery from therelated civil action, including deposition testimonyand foreign-origin documents brought into the UnitedStates by the civil defendants. Pet. 12. After thedistrict court quashed the subpoenas, the NinthCircuit reversed. The Ninth Circuit based its decisionon a per se rule in which a grand jury subpoenaalways trumps a civil protective order, regardless ofany countervailing considerations. This resultautomatically "expand[s] the DOJ’s subpoena powerbeyond its current geographical limits," and providesthe government with criminal discovery it would nothave obtained but for the defendants’ good-faithreliance on the discovery and protective orders in theconcurrent civil litigation. App. 6a.

Like the Ninth Circuit, the Fourth and EleventhCircuits have utilized a per se rule favoring grandjury subpoenas over protective orders in allcircumstances. In contrast, the Second Circuit adoptedthe opposite approach, extending the safeguards of acivil protective order to grand jury subpoenas absentextraordinary circumstances. The First and ThirdCircuits have chosen a middle ground: a rebuttablepresumption that grand jury subpoenas will beenforced over civil protective orders. Thus, sixfederal circuits have developed three completelydifferent outcomes for defendants that face simul-taneous civil and criminal proceedings and that mustchoose between defending their rights in one forum totheir detriment in the other. This circuit split isplainly ripe for the Court’s review.

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ARGUM]~NT

I. THIS COURT’S REVIEW IS NEEDED TOCORRECT THE DECISION BELOW ANDRESOLVE A THREE-WAY CIRCUIT SPLIT.

This Court has endorsed the use of "protectiveorders to prevent parties from using civil discovery toevade restrictions on discovery in criminal cases."Degen v. United States, 517 U.S. 820, 826 (1996). TheNinth Circuit, however, has failed to heed thisCourt’s guidance. Applying a per se rule in which agrand jury subpoena always trumps a civil protectiveorder, the Ninth Circuit dramatically expanded theDOJ’s subpoena power, App. 6a, and jeopardized thedistrict court’s ability to conduct full and fair civilproceedings. See Seattle Times Co. v. Rhinehart,467 U.S. 20, 36 (1984) ("The unique character of thediscovery process requires that the trial court havesubstantial latitude to fashion protective orders.").

The Ninth Circuit’s decision leads to two immediateand harmful consequences. First, it incentivizesplaintiffs to seek overly broad and foreign-baseddiscovery from civil defendants in order to leveragethe specter of possible criminal prosecution and thusforce quick and unwarranted settlements. Second,the decision below exacerbates a troubling three-waycircuit split that will encourage predatory forumshopping.

A. Plaintiffs Can Exploit The Ninth Cir-cult’s Per Se Rule To Leverage SpeedyAnd Sizable Settlements In Non-Meritorious Cases.

As this Court has recognized, requiring a corpora-tion to defend itself through the testimony of anemployee that might "subject[] himself to a ’real and

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appreciable risk’ of self-incrimination" presents a"troublesome question." United States v. Kordel, 397U.S. 1, 8-9 (1970). "[I]n such a case," the Court posited,"the appropriate remedy would be a protective orderunder Rule 30(b), postponing civil discovery untiltermination of the criminal action." Id. at 9.Defendants in this case sought to stay discovery, butthe district court denied that request in favor oflimited discovery and the protective order that wasnullified subsequently by the Ninth Circuit. App. 5a.This outcome is characteristic of the predicamentfaced by other litigants in concurrent civil and criminalproceedings where discovery stays are denied. See,e.g., In re Grand Jury Subpoena, 836 F.2d 1468, 1469(4th Cir. 1998) (district court denied stay and issuedprotective order tosafeguard deponents’ FifthAmendment rights).

When civil discovery is allowed to proceed, as here,a protective order provides no shelter from a grandjury subpoena under the Ninth Circuit’s per se rule.The Ninth Circuit’s rule forces deponents to asserttheir Fifth Amendment privilege and withholdtestimony in order to avoid self-incrimination in theconcurrent criminal proceeding. This "untenable"choice potentially deprives the corporate defendant ofvaluable evidence necessary to defend the civil suit.App. 5a. Similarly, defendants in follow-on suitscannot rely on a protective order to shield documentsproduced during civil discovery from a grand jurysubpoena, even when those documents originatedbeyond the territorial subpoena power of U.S.prosecutors. Accordingly, the only way for a civildefendant to prevent the government from usingforeign-based documents in a concurrent criminalproceeding would be to refuse to produce thosedocuments in civil discovery.

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Noncompliance with civil discovery carries heavypenalties. A defendant’s refusal to comply withrelevant discovery requests can result in monetarysanctions, adverse inferences, and even default onthe civil claims. Fed. R. Civ. P. 37(b)(2); Mitchell voUnited States, 526 U.S. 314, 328 (1999) ("invocationof the [Fifth Amendment] privilege... [runs] the riskof suffering an adverse inference or even a default");Roadway Express, Inc. v. Piper, 447 UoS. 752, 763(1980) (cataloging discovery sanctions); see also, e.g.,Lockheed Martin Corp. v. L-3 Commc’ns IntegratedSys., L.P., No. 05-CV-902, 2010 WL 1891779 (N.D.Ga. Mar. 31, 2010) (vacating $37.3 million jury awarddue to discovery noncompliance). Because the FifthAmendment does not protect against the adverseconsequences of silence in civil litigation, Baxter v.Palmigiano, 425 U.S. 308, 316-18 (1976), defendantsface a legal dilemma: either defend oneself fully inthe civil action at the risk of providing thegovernment criminal discovery to which it has noright to access, or risk severe adverse consequencesin the civil litigation in order to avoid disclosingincriminating information that lies beyond the grandjury’s reach.

The mere existence of this dilemma dramaticallyincreases the ex ante costs of civil litigation asdefendants must take appropriate and costly measuresto reduce potential criminal exposure. For example,defendants may elect to review foreign-based docu-ments abroad rather than risk bringing thosedocuments into the United States. Defendants alsomight file additional, aggressive motions to limitbroad discovery requests on the basis of relevancy,oppression, or undue burden. Fed. R. Civ. P. 26(b)(1),(c). These measures, which are necessary to mitigatethe risk that civil discovery will be misused

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in criminal proceedings, come with significant finan-cial costs borne overwhelmingly by defendants.

Even more significantly, enterprising plaintiffs canexploit these ex ante costs, as well as defendants’concern about disclosing potentially incriminatingevidence to which the government is not otherwiseentitled, in order to leverage settlements in non-meritorious civil cases. Defendants may be willing tosettle such cases rather than risk the threat ofhaving documents and deposition testimony subpoe-naed in a concurrent criminal investigation and toavoid the high legal costs required to limit the scopeof civil discovery. See Stoneridge Inv. Partners, LLCv. Scientific-Atlanta, Inc., 552 U.S. 148, 163 (2008)(weighing the "practical consequenceS" "that extensivediscovery and the potential for uncertainty anddisruption in a lawsuit allow plaintiffs with weakclaims to extort settlements from innocent compa-nies"). In contrast, in jurisdictions where defendantscan rely on civil protective orders to shield discoveryfrom grand jury subpoenas (like the Second Circuit),costly ex ante remedial measures would beunnecessary and the civil playing field would beleveled.2

2 The risk of unwarranted settlement has a long pedigree inprivate antitrust litigation. See Antitrust Damage Allocation:Hearings Before the Subcomm. on Monopolies and CommercialLaw of the H. Comm. on the Judiciary, 97th Cong. 7 (1982), p.67 (statement of Hon. William F. Baxter, Assistant AttorneyGeneral, Antitrust Division, Department of Justice) (expressingthe need to "reduce certain abuses of antitrust litigation thatnow occur, cases that are brought without any very substantialprospect of success and really can only be characterized asshakedown attempts, whereby people are induced to settle tosave the litigation and discovery costs and so on that liebetween them and the future"); Antitrust Equal Enforcement

8

Federal courts have no interest in promoting the"type of litigation, where the mere existence of anunresolved lawsuit has settlement value to theplaintiff... [only] because of the threat of extensivediscovery and disruption of normal business activitieswhich may accompany a lawsuit which is groundlessin any event." Blue Chip Stamps v. Manor DrugStores, 421 U.S. 723, 742-43 (1975). Rather, "whenthe costs of discovery and litigation are used to forcesettlement even absent fault or injury.., the Court,by failing to adopt a reasonable interpretation tocounter th[is] excess[], risks compromising its owninstitutional responsibility to ensure a workable andjust litigation system." Jerman v. Carlisle, McNellie,Rini, Kramer & Ulrich LPA, 130 S. Ct. 1605, 1628-29(2010) (Kennedy, J., dissenting).

Finally, the government’s lack of "bad faith" inproceedings below, App. 3a, is irrelevant. Collusionbetween prosecutors and plaintiffs is unnecessary insituations, like this one, where the interests ofplaintiffs and prosecutors align; plaintiffs have theincentive to seek overly broad civil discovery preciselybecause prosecutors could use that discovery--towhich they are not otherwise entitled--to secure acriminal indictment or conviction. The specter ofcriminal prosecution inevitably inures to plaintiffs’benefit, and plaintiffs do not need the government’s

Act of 1979: Hearings on S. 1468 Before the Subcomm. on Anti-trust, Monopoly, and Business Rights of the Senate Comm. onthe Judiciary, 96th Cong. 85 (1979), p. 66 (statement of DonaldG. Kempf, Jr.) ("The fact of the matter is that today antitrustsettlements are being entered into which bear no necessaryrelationship to whether or not the defendants engaged in anyimproper conduct or whether or not the plaintiffs suffered anydamage.").

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complicity or involvement in such tactics. As aresult, disputes like this one can be expected to recur.See Mike Scarcella, DOJ Defending Grand JurySubpoenas in Trade Secrets Theft Investigation, TheBlog of LegalTimes, Mar. 22, 2011 (covering recentproceedings in the Fourth Circuit over an accusation"that prosecutors were unfairly piggybacking on[discovery in a] civil action, using subpoenas to try tograb documents outside of the grand jury’s power"),available at http://legaltimes.typepad.com]blt/2011/03/doj-defending-grand-jury-subpoenas-in-trade-secrets-theft-investigation.html.

B. The Existing Circuit Split IncentivizesForum Shopping.

In the Fourth, Ninth, and Eleventh Circuits (theper se Circuits), civil defendants risk sanctions,adverse inferences, or default in order to protect fullytheir constitutional right against self-incrimination.Pet. 16-18. In contrast, defendants in the SecondCircuit can rely on the security afforded by a civilprotective order to produce documents and robustlydefend a civil lawsuit on the merits without fearingthe government’s exploitation of civil disclosures tosecure a criminal indictment. Pet. 18-20. Without adoubt, plaintiffs who bring follow-on civil lawsuits inthe Fourth, Ninth, and Eleventh Circuits have adistinct strategic advantage that is unavailable toplaintiffs in the Second Circuit.

The temptation to forum shop is irresistible underthese conditions. That temptation increases in casesinvolving large corporations, which, because of theirfar-reaching enterprises, usually are subject topersonal jurisdiction in multiple circuits. It would benaive to think that plaintiffs would not exploit such a

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significant advantage that they can leverage forsettlement purposes when given the option ofbringing a follow-on lawsuit in the Ninth Circuitversus the Second Circuit. Prosecutors, too, face thesame temptation to forum shop, given their discretionin selecting an appropriate jurisdiction from whichto issue a subpoena. Even the possibility thatprosecutors would be employing such gamesmanshipundermines public confidence in the uniform and fairapplication of criminal laws.

Presently, half of the nation’s circuit courts haveruled on the interplay between civil protective ordersand grand jury subpoenas. The result is threedifferent, intractable positions on this issue amongthe three most active circuits for federal antitrustlitigation. Pet. 16-23 (detailing circuit split); DonaldW. Hawthorne, Recent Trends in Federal AntitrustClass Action Cases, 24 Antitrust 58, 59 (2010)(62% of antitrust class action suits are filed in theNinth, Third, and Second Circuits). In anotherrecent case, the government successfully soughtcertiorari on the ground that a single inconsistentcircuit decision, "if left unreviewed, w[ould] encouragecorporate entities to engage in forum shopping tocapitalize on the ruling." Reply Brief for the UnitedStates at 9-10, FCC v. AT&T Inc., 131 S. Ct. 1177(2011) (No. 09-1279), 2010 WL 3019690. The circuitsplit in this case is indisputably broader than it wasin FCC v. AT&T and just as stark. In order toprevent forum shopping and ensure the uniformapplication of laws nationwide, the Court shouldgrant certiorari and resolve these inconsistentjudgments.

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II. THIS CASE HAS BROAD IMPLICATIONSFOR NUMEROUS AREAS OF LAW.

As Petitioner correctly notes, civil suits often followimmediately on the heels of the government’sannouncement of a criminal investigation. Pet. 5;App. 8a. Nearly 60% of federal antitrust class actioncases filed from 2007 to 2009 arose from a priorgovernment enforcement action. Hawthorne, supra,at 58 (reviewing 121 lead cases compiled from 1,811class action complaints). A survey of the 40 largestsuccessful private antitrust lawsuits similarly revealedthat only 15 of those cases did not follow governmentenforcement actions. Robert H. Lande & Joshua P.Davis, Benefits From Private Antitrust Cases: AnAnalysis of Forty Cases, 42 U.S.F.L. Rev. 879, 897-98(2008). In antitrust cases like this one, piggybackplaintiffs seek to reap the spoils of a governmentinvestigation by filing civil lawsuits for trebledamages and attorneys’ fees under the Clayton Act.15 U.S.C. § 15.

This "follow-on phenomenon" recurs in a broadrange of cases affecting many business sectors. Inaddition to the antitrust context, similar suits havebeen filed in products liability, securities, white collar,civil rights, and consumer fraud litigation. HowardM. Erichson, Coattail Class Actions: Reflections onMicrosoft, Tobacco, and the Mixing of Public andPrivate Lawyering in Mass Litigation, 34 U.C. DavisL. Rev. 1, 2 (2000); see also Pet. 24-25. The practicehas become so ubiquitous that one commentatorconcluded, "[c]oattail class actions are a commonfeature of mass litigation" today. Erichson, supra,at 5. In this case alone, nearly 140 putative classaction complaints were filed throughout the countryfollowing news that the DOJ was investigating

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potential antitrust violations within the TFT-LCDindustry. Pet. 4; App. 2a.

Consequently, the practical impact of the NinthCircuit’s per se rule and the existing circuit split willbe felt in multiple areas of law and will affectnumerous industries in the United States andabroad. These broad ramifications have promptedclose attention to the outcome of this case, as well asamici’s participation here. Mike Scarcella, DOJPresses Law Firms in LCD Probe, Nat’l L. J., May 10,2010, at 6. The importance of resolving this circuitsplit and correcting the Ninth Circuit’s decision belowwarrants the Court’s attention.

CONCLUSION

For the reasons set forth above, the Chamber andDRI respectfully submit that the petition for a writ ofcertiorari should be granted.

ELLEN K. REISMANARNOLD & PORTER LLP777 S. Figueroa Street44th FloorLos Angeles, CA 90017(213) 243-4000Counsel for Amici Curiae

ROBIN S. CONRADNATIONAL CHAMBER

LITIGATION CENTER1615 H Street, NWWashington, DC 20062(202) 463-5337Counsel for Chamber of

Commerce of the UnitedStates of America

Respectfully submitted,

LISA S. BLATTCounsel of Record

R. REEVES ANDERSONARNOLD 8~ PORTER LLP555 12th Street, NWWashington, DC 20004(202) 942-5000lisa.blatt@aporter.comCounsel for Amici Curiae

R. MATTHEW CAIRNSGALLAGHER CALLAHAN

& GARTRELL PC214 North Main StreetConcord, NH 03301(603) 545-3622Counsel for DRI--The Voice

of the Defense Bar