Supreme Court, U.&FILED

No. ~ 011 4 7 FEB 2 5 ZO11

OFFICE OF THE CLERK

WHITE & CASE ]..,I~,

Petitioner,

V.

UNITED STATES OF AMERICA,

On Petition for a Writ of Cert/orari to theUnited States Court of Appeals

for the Ninth Circuit

PETITION FOR A WRIT OF CERTIORARI

JOHN H. CHUNG CHRISTOPHER M. CUItRANMARTIN M. TOTO Counsel of P, ecordWHITE & CASE LLP EI~C GRANNON1155 Ave. of the Americas WHITE & CASE LLPNew York, NY 10036 701 Thirteenth St., N.W.(212) 819-8200 Washington, DC 20005

(202) 626-3600ccurran@whitecase.com

~oun~I ~r Pet~’tioner

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

Blank Page

(i)

QUESTION PRESENTED

The public revelation of a federal grand juryinvestigation into business conduct routinely triggersfollow-on class actions, and the grand juryinvestigation and ensuing civil actions often proceedconcurrently. In the civil actions, district judgesfrequently issue protective orders to secure importantinterests, such as the confidentiality of competitivelysensitive business information disclosed in discovery.When federal prosecutors serve grand jury subpoenasfor such protected discovery materials, the courtsmust decide whether the grand jury subpoenaoverrides the civil protective order.

Here, the Ninth Circuit applied that circuit’s "perse rule" that a grand jury subpoena always trumps acivil protective order, regardless of anycountervailing considerations such as the territoriallimitations on a grand jury’s subpoena power. Instark contrast to the Ninth Circuit’s ’’pe~, se rule," thegoverning rule in the Second Circuit presumes that acivil protective order trumps a grand jury subpoena,absent certain exceptional circumstances. Theseirreconcilable rules bookend an express, three-wayconflict among six circuits on this important questionof federal practice. The question presented is asfollows:

Whether a grand jury subpoena always trumps acivil protective order, thus allowing prosecutors toobtain discovery materials from a parallel civilaction, regardless of any countervailingconsiderations.

(ii)

PARTIES TO THE PROCEEDINGS BELOW

The parties to the proceeding in the court whosejudgment is the subject of this petition are as follows:

Petitioner in this Court, appellee below, is White& Case LLP. Additional appellees below who are notparties to this petition include Nossaman LLP andK&L Gates LLP.

Respondent in this Court, appellant below, is theUnited States of America.

RULE 29.6 STATEMENT

Pursuant to Rule 29.6 of this Court’s Rules,Petitioner states as follows:

White & Case LLP, a law firm, has no parentcompany, and no publicly held corporation owns 10percent or more of its stock.

Toshiba Corporation ("Toshiba"), Toshiba MobileDisplay Co., Ltd. ("TMD") (f/k/a Toshiba MatsushitaDisplay Technology Co., Ltd.), Toshiba AmericaElectronic Components, Inc. ("TAEC"), and ToshibaAmerica Information Systems, Inc. ("TAIS"), the realparties in interest, hereby state as follows: Toshibahas no parent company, and no publicly heldcorporation owns 10 percent or more of its stock.TMD is a wholly-owned subsidiary of Toshiba. TAECand TAIS are wholly-owned subsidiaries of ToshibaAmerica, Inc., which is a holding company whollyowned by Toshiba.

(iii)TABLE OF CONTENTS

PAGE(S)

QUESTION PRESENTED ...........................................i

PARTIES TO THE PROCEEDINGS BELOW ...........ii

RULE 29.6 STATEMENT ...........................................ii

TABLE OF AUTHORITIES .......................................vi

PETITION FOR A WRIT OF CERTIORARI ..............1

OPINIONS BELOW ....................................................1

JURISDICTION ..........................................................1

RULES INVOLVED ....................................................1

STATEMENT OF THE CASE ....................................2

REASONS FOR GRANTING THE PETITION ........14

I. THE INTERPLAY OF GRAND JURYSUBPOENAS AND CIVIL PROTECTIVEORDERS HAS LED TO AN EXPRESS,THREE-WAY CONFLICT AMONG SIXCIRCUITS ..........................................................16

A. The Per Se Rule Prioritizing GrandJury Subpoenas Over Civil ProtectiveOrders .........................................................16

B. The Second Circuit Rule PrioritizingCivil Protective Orders Over GrandJury Subpoenas ..........................................18

C. A Third Approach: The RebuttablePresumption in Favor of Grand JurySubpoenas ...................................................21

II.

(iv)TABLE OF CONTENTS--Continued

PAGE(S)

THE INTERPLAY OF GRAND JURYSUBPOENAS AND CIVIL PROTECTIVEORDERS IS A PIVOTAL ISSUE,PARTICULARLY IN HIGH-STAKESBUSINESS CASES, AND REQUIRES AUNIFORM RULE TO PREVENT FORUMSHOPPING ........................................................23

III. THE NINTHEXACERBATESCONFLICT BYPROSECUTORSTERRITORIAL

CIRCUIT’S DECISIONTHE CIRCUIT

ENABLING FEDERALTO CIRCUMVENTLIMITATIONS ON

GRAND JURY SUBPOENAAUTHORITY ......................................................29

CONCLUSION ..........................................................38

APPENDIX A: Opinion of the United StatesCourt of Appeals for the Ninth Circuit ............la

APPENDIX B: Statement of ReasoningInvolved in February 11, 2010 Opinion ofUnited States District Court for theNorthern District of California .........................4a

APPENDIX C: Order of the United StatesDistrict Court for the Northern District ofCalifornia Denying United States’Objections to Special Master’s August 24,2009 Report and Recommendation;Adopting Report and Recommendation ............9a

(v)TABLE OF CONTENTS--Continued

PAGE(S)

APPENDIX D: Special Master’s Report &Recommendation re: Toshiba Entities’Motion for Modifications to the DiscoverySchedule and Plan ...........................................

APPENDIX E: Order of the United StatesDistrict Court for the Northern District ofCalifornia Granting United States’Motion to Modify the Court’s September25, 2007 Order .................................................16a

TABLE OF AUTHORITIES

CASES

PAGE(S)

Bell Atl. Corp. y. Twombly,550 U.S. 544 (2007) .......................................3, 27

Dura Pharm., Inc. v. Broudo,544 U.S. 336 (2005) .............................................3

Emerson Elec. Co. v. Le Carbone Lorraine, S.A.,No. 05-6042 (JBS), 2008 WL 4126602(D.N.J. Aug. 27, 2008) .......................................36

F. Ho££mann-LaRoehe Ltd. v. Empagran S.A.,542 U.S. 155 (2004) ............................... 32, 36, 37

Hanna v. Plumer,380 U.S. 460 (1965) ...........................................27

In re Grand Jury,286 F.3d 153 (3d Cir. 2002) ...................21, 22, 26

In re Grand Jury Proceedings (Williams),995 F.2d 1013 (11th Cir. 1993) .........................18

In re Grand Jury Subpoena,836 F.2d 1468 (4th Cir. 1988) ...........................18

In re Grand Jury Subpoena Duees TeeumDated Apr. 19, 1991, 945 F.2d 1221(2d Cir. 1991) ......................................18, 19, 26

(vii)

TABLE OF AUTHORITIES~Continued

PAGE(S)

In re Grand Jury Subpoena ~oach),138 F.3d 442 (1st Cir. 1998) ........................ 21, 22

In re Grand Jury Subpoena Served onMoserve, Mumper & Hughes,62 F.3d 1222 (9th Cir. 1995) .................13, 17, 18

In re TFT-LCD (Flat Panel) Antitrust Litig.,No. 3:07-md-1827 SI (N.D. Cal. Dee. 10,2007) .....................................................................8

Martindell v. Int7 Tel. & Tel. Corp.,594 F.2d 291 (2d Cir. 1979) ...................18, 19, 20

Minpeco S.A. v. ContiCommodity Servs. Inc.,832 F.2d 739 (2d Cir. 1987) ...............................19

Seattle Times Co. v. Rhinehart,467 U.S. 20 (1984) ...............................................3

SECv. Merrill Scott & Assets., Ltd.,600 F.3d 1262 (10th Cir. 2010) .........................20

United States. v. R. Enters.,498 U.S. 292 (1991) .........................................3, 4

United States v. (Under Seal),714 F.2d 347 (4th Cir. 1983) .............................28

Volkswagen werk Aktiengesellseha£t v. Sehlunk,486 U.S. 694 (1988) ..................................... 32, 33

(viii)TABLE OF AUTHORITIES--Continued

PAGE(S)

STATUTES AND RULES

Fed R. Civ. P.

26(c) ........................................................1, 2, 3, 18

Fed. R. Crim. P.17(c)(2) ...................2, 4, 12, 13, 17, 18, 21, 22, 28

15 U.S.C.§ 15 .......................................................................4§ 26 .......................................................................4

18 U.S.C.§ 3231 .................................................................12

28 U.S.C.§ 1254 ...................................................................1§ 1407 ...................................................................5

OTHER AUTHORITIES

ABA, Section of Antitrust Law, AntitrustLaw1)eyeIopments (6th ed. 2007) ....................23

ABA, Section of Antitrust Law, Handbookon Grand Jury Investigations (3d ed.2002) .........................................................9, 10, 31

Brief for the United States as AmicusCuriae Supporting Petitioners, F.Hoffmann-LaRoche Ltd. v. EmpagranS.A., 542 U.S. 155 (2004) (No. 03-724) .............37

(ix)TABLE OF AUTHORITIES--Continued

PAGE(S)

Brief for the United States as AmicusCuriae Supporting Petitioners,Goodyear Luxembourg Tires, S.A.v.Brown, (No. 10-76) (U.S. filed Nov. 19,2010) ...................................................................33

Charles Alan Wright & Peter J. Henning,Federal Practice and Procedure:Criminal (4th ed. 2010) ....................................23

Convention on the Service Abroad ofJudicial and Extrajudicial Documentsin Civil or Commercial Matters, Nov.15, 1965, 20 U.S.T. 361, 658 U.N.T.S.163 ..................................................................6, 32

Donald W. Hawthorne, Recent Trends inFederal Antitrust Class Action Cases,24 Antitrust 58 (Summer 2010) .......................... 5

Joel I. Klein, Assistant Attorney Gen.,Antitrust Division, Statement Beforethe Subcommittee on Antitrust,Business Rights and Competition ofthe Senate Committee on theJudiciary Concerning InternationalAntitrust Enforcement (May 4, 1999),available at www.justice.gov/atr/public/Testimony/2413.pdf ........................... 9

(x)TABLE OF AUTHORITIES~Continued

PAGE(S)

John Gleeson (U.S. District Judge,E.D.N.Y.), et al., Federal CriminalPractice: A Second Circuit Handbook(2010) .................................................................20

Restatement (Third) of Foreign RelationsLaw of the United States (1987) .......................32

United States Department of Justice,Crimina] Resource Manual, availab]eat www.j ustice.gov/usa/eousafoia_reading_room/usam/title9/crm00200.htm .......................................................................10

United States Department of Justice,Antitrust Division, Antitrust DivisionManual (4th ed. 2008), available atwww.j u stice, gov/atr/public/divisionmanual/chapter3.pdf .........................................28

United StatesDepartment of Justice,Antitrust Division, Grand JuryManual (1991), a vailable atwww.justiee.gov/atr/publie/guidelines/206696.htm ............................................10, 11, 31

United States Department of State,Enforcement of Judgment~,http://travel.state.gov/law/judicial]judicial_691.html (last visited Feb. 23,2011) .............................................................33, 34

PETITION FOR A WRIT OF CERTIORARI

Petitioner White & Case LLP respectfullypetitions this Court for a writ of certiorari to reviewthe judgment of the United States Court of Appealsfor the Ninth Circuit.

OPINIONS BELOW

The opinion of the court of appeals (App. la) isreported at 627 F.3d 1143 (9th Cir. 2010). The orderof the court of appeals issuing the mandate (SealedApp. 1) is not reported.

The opinion of the district court quashing thegrand jury subpoenas (Sealed App. 2) was filed underseal and is not reported.

The district court issued an unsealed "Statementof Reasoning" explaining its decision quashing thegrand jury subpoenas (App. 4a). The Statement ofReasoning is not reported.

JURISDICTION

The judgment of the court of appeals was enteredon December 7, 2010. This Court has jurisdictionunder 28 U.S.C. § 1254(1).

RULES INVOLVED

Rule 26(c)(1) of the Federal Rules ofProcedure provides in relevant part:

A party or any person from whomdiscovery is sought may move for aprotective order .... The court may, forgood cause, issue an order to protect aparty or person from annoyance,embarrassment, oppression, or undue

Civil

2burden or expense, including one ormore of the following: (A) forbidding thedisclosure or discovery; (B) specifyingterms, including time and place, for thedisclosure or discovery; (C) prescribing adiscovery method other than the oneselected by the party seeking discovery;(D) forbidding inquiry into certainmatters, or limiting the scope ofdisclosure or discovery to certainmatters; (E) designating the personswho may be present while the discoveryis conducted; (F) requiring that adeposition be sealed and opened only oncourt order; (G) requiring that a tradesecret or other confidential research,development or commercial informationnot be revealed or be revealed only in aspecified way ....

Rule 17(c)(2) of the Federal Rules of CriminalProcedure provides: "On motion made promptly, thecourt may quash or modify the subpoena ifcompliance would be unreasonable or oppressive."

STATEMENT OF THE CASE

This petition concerns a recurring issue of criticalimportance: whether a grand jury subpoena trumpsa civil protective order regardless of anycountervailing considerations, thus permittingfederal prosecutors to obtain discovery produced in aparallel civil action under all circumstances. Thecourts of appeals are divided on this issue.

1. Rule 26(c)(1) of the Federal Rules of CivilProcedure provides district courts with broad

3discretion, upon a finding of good cause, to enterprotective orders limiting the timing, use anddissemination of discovery. See Seattle Times Co. v.Rhinehart, 467 U.S. 20, 36 (1984) ("The uniquecharacter of the discovery process requires that thetrial court have substantial latitude to fashionprotective orders."). Protective orders serve variousimportant functions, including preserving theconfidentiality of trade secrets or sensitivecommercial information. Fed. R. Civ. P. 26(c)(1)(G).Protective orders are essential in "secur[ing] the just,speedy, and inexpensive determination" of civilactions by encouraging full disclosure of relevantevidence. See Fed. R. Civ. P. 1. For example, inSeattle Times, this Court held that a protective orderwas enforceable and consistent with the FirstAmendment, even though the protective orderrestricted the press’s ability to use the fruits ofpretrial civil discovery. 467 U.S. at 37 (1984).

The discretion of district courts to enter protectiveorders is necessary because civil discovery under theFederal Rules is exceptionally broad. See id. at 34("Because of the liberality of pretrial discoverypermitted by Rule 26(b)(1), it is necessary for thetrial court to have the authority to issue protectiveorders conferred by Rule 26(c)."). Discovery inantitrust cases, for example, is infamously intrusive.See Boll Atl. Corp. v. Twombly, 550 U.S. 544, 559(2007) (noting the "enormous expense of discovery in"antitrust cases) (quoting Dura Pharm., Inc. v.Broudo, 544 U.S. 336, 347 (2005)).

2. "The grand jury occupies a unique role in ourcriminal justice system. As a necessaryconsequence of its investigatory function, the grand

4

jury paints with a broad brush." United States v. R.Enters., 498 U.S. 292, 297 (1991). "The investigatorypowers of the grand jury are nevertheless notunlimited." Id. at 299. Rule 17(c)(2) of the FederalRules of Criminal Procedure vests district judgeswith discretion to determine the enforceability ofgrand jury subpoenas: "On motion made promptly,the court may quash or modify the subpoena ifcompliance would be unreasonable or oppressive."

Addressing this standard under Rule 17(c)(2), thisCourt held in R. Entorprise~. "This standard is notself-explanatory. As we have observed, what isreasonable depends on the context." 498 U.S. at 299(1991) (citation and internal quotation marksomitted). Thus, this Court has confirmed what thetext of Rule 17(c)(2) naturally suggests: a motion toquash under Rule 17(c)(2) requires a fact-intensive,circumstantial inquiry by the district judge.

3. In December 2006, news reports revealed acriminal grand jury investigation being conducted bythe United States Department of Justice, AntitrustDivision ("DOJ"), into the thin-film transistor, liquidcrystal display ("TFT-LCD") industry. App. 2a. As istypical upon the revelation of a grand juryinvestigation into antitrust, securities and otherbusiness conduct, the class-action bar filed dozens ofputative class actions within a matter of days. App.2a. Eventually, close to 140 such putative classaction complaints (the "Class Actions") were filedaround the country, seeking treble damages,attorneys’ fees and injunctive relief under theClayton Act. 15 U.S.C. §§ 15, 26 (2011).

5As the district court observed: "It often happens

that civil cases are filed on the heels of anannouncement about a criminal grand juryinvestigation .... " App. 8a; see also Donald W.Hawthorne, Recent Trends in Federal AntitrustClass Action Cases, 24 Antitrust 58, 58 (Summer2010) (in a survey of 1,811 antitrust class actionsfiled between January 1, 2007 and December 31,2009, nearly 60% arose from prior governmentenforcement action). Indeed, here DOJ conceded thatits grand jury investigation caused the Class Actions.See United States’ Notice of Mot. and Mot. to Modifythe Court’s Sept. 25, 2007 Order Granting UnitedStates’ Mot. to Stay Discovery at 6-7, In re TFT-LCD(Flat Panel) Antitrust Litig., No. 3:07-md-1827 SI(N.D. Cal. May 18, 2009) (ECF No. 990).

Pursuant to 28 U.S.C. § 1407, the Judicial Panelon Multidistriet Litigation transferred the ClassActions to the United States District Court for theNorthern District of California for coordinatedpretrial proceedings. Not eoineidentally, the ClassActions were transferred to the same district inwhich the grand jury investigating the TFT-LCDindustry also sits. See Plaintiffs’ Mot. for Transferand Consolidation of Related Antitrust Actions to theNorthern District of California Pursuant to 28 U.S.C.§ 1407 at 10, In re TFT-LCD (Flat Panel)AntitrustLitig., No. MDL 1827 (J.P.M.L. Dee. 22, 2006) (ECFNo. 1) ("This Panel often gives deference to the forumwhere related grand jury proceedings andgovernmental investigations are pending.") (citationsomitted). Indeed, the district judge below, theHonorable Susan Y. Illston, presides over not onlythe Class Actions, but also the various criminal

6

proceedings against TFT-LCD manufacturers. JudgeIllston also granted the motions to quash that gaverise to this petition.

Plaintiffs in the Class Actions named asDefendants a number of foreign corporations,including certain Toshiba entities represented byWhite & Case. Personal jurisdiction over theseforeign parties in the Class Actions was perfected byservice of process under the Hague Convention onservice of civil process abroad. See Convention on theService Abroad of Judicial and ExtrajudicialDocuments in Civil or Commercial Matters, Nov. 15,1965, 20 U.S.T. 361, 658 U.N.T.S. 163 (the "HagueConvention"); Certificate of Service, In re TFT-LCD(Fiat Panel) Antitrust Litig., No. 3:07-md-1827 SI(N.D. Cal. Feb. 15, 2008) (ECF No. 453-7)(certification that class action complaint was properlyserved under the Hague Convention on a Toshibaentity in Japan).

The Toshiba entities have steadfastly denied anywrongdoing and have not been indicted by the grandjury, which has investigated the industry for overfour years; other industry participants have pleadedguilty to antitrust offenses or have been indicted andare awaiting trial.

Notably, early on in the Class Actions DOJintervened, seeking to influence the civil discoverybased on DOJ’s priorities for the parallel grand juryinvestigation. In particular, DOJ made twoarguments seeking to stay discovery in the ClassActions. App. 5a. First, DOJ argued that "becausecivil discovery is broader than criminal discovery,there was the risk that parties in the civil action

7

would be able to discover sensitive information aboutthe grand jury investigation through civil discovery,"thereby interfering with the criminal investigation.App. 5a.

Second, DOJ argued:

[I]f civil discovery proceeded in tandemwith the grand jury proceedings,employees of the companies underinvestigation could be placed in theuntenable po~ition of having to choosebetween asserting their FifthAmendment right against self-incrimination in a civil deposition, withthe negative inference that comes withthat decision, or testifying in a civildeposition and running the risk of self-incrimination in the criminal matter.

App. 5a (emphasis added). Thus, in addition torecognizing the broader reach of civil discovery, DOJacknowledged the significant risks facing partiesinvolved in both the grand jury investigation and theconcurrent Class Actions.

Judge Illston granted DOJ’s motion and enteredan order staying most discovery and permitting DOJto "review but not copy" the limited class-certificationdiscovery that was allowed to proceed while the staywas in place. App. 5a. While the "review"mechanism addressed DOJ’s concerns that civildiscovery could interfere with the grand juryinvestigation, the stay order prohibited DOJ fromcopying civil discovery for use as evidence in thegrand jury investigation.

8In addition, to protect and limit the use of civil

discovery, Judge Illston entered a protective orderupon a finding of good cause:

Disclosure and discovery activity in thisaction may involve production oftrade secrets or other confidentialresearch, development, or commercialinformation, within the meaning of Fed.R. Civ. P. 26(c); or other private orcompetitively sensitive information forwhich special protection from publicdisclosure and from use for any purposeother than prosecuting this litigationwould be warranted.

In re TFT-LCD (Flat Panel) Antitrust Litig., No.3:07-md-1827 SI, at 1 (N.D. Cal. Dee. 10, 2007) (ECFNo. 421) (Protective Order).

4. More than two years after the grand juryinvestigation became public, DOJ approached theparties in the Class Actions and requested copies ofall civil discovery, including foreign documents anddeposition testimony originating outside the UnitedStates that would otherwise lie outside the grandjury’s subpoena power. When certain partiesdeclined, DOJ demanded the entire civil discoveryrecord (including documents produced in the future)by seeking a modification of the discovery stay order.The Toshiba entities objected, and the HonorableFern M. Smith, a former United States District Judgesitting as Special Master in the Class Actions, issueda Report and Recommendation prohibiting DOJ fromcopying the foreign documents and depositiontranscripts of Defendants in the Class Actions who

9

had not been indicted by the grand jury. App. 14a-15a. The Special Master’s Report andRecommendation also prohibited DOJ frompresenting any such materials to the grand jury.App. 14a. Judge Illston adopted the Special Master’sReport and Recommendation. App. 9a-10a.

In these decisions, the Special Master and JudgeIllston acknowledged that "[i]t is not disputed thatforeign discovery is generally outside the UnitedStates subpoena power in criminal proceedings."App. 13a. See aIso Joel I. Klein, Assistant AttorneyGen., Antitrust Division, Statement Before theSubcommittee on Antitrust, Business Rights andCompetition of the Senate Committee on theJudiciary Concerning International AntitrustEnforcement at 8 (May 4, 1999), available athttp://justice.gov/atrlpublic/testimony/2413.pdf. ("Theinvestigation and prosecution of international cartelscreates a number of imposing challenges for theDivision. In many cases, key documents andwitnesses are located abroad---out of the reach of U.S.subpoena power and search and seizure authority.").

For these reasons, when DOJ serves grand jurysubpoenas, its practice is to seek foreign documentssolely on a voluntary basis, a practice that initiallywas followed in this case: "The Division’s normalprocedure is to accompany subpoenas that mayencompass foreign-located documents with a note tothe effect that production of foreign materials shouldbe considered voluntary unless and until thesubpoena recipient is otherwise notified by theDivision." ABA, Section of Antitrust Law, Handbookon Antitrust Grand Jury Investigations 293 (3d ed.2002) (" Grand Jury Handbool~’).

10In light of these limitations on the grand jury’s

subpoena power, several methods have becomeestablished over time as the primary means by whichfederal prosecutors may request foreign discovery fora criminal investigation: (i) letters rogatory;(ii) treaties, including mutual legal assistancetreaties ("MLATs"); and (iii) informal diplomaticrequests. App. 7a. These established methods areset forth in DOJ’s own manuals and are specificallydesigned to respect the rights of foreign sovereignsand foster international comity. See United StatesDepartment of Justice, Criminal Resource Manual§§ 267, 274-78, available at http://www.justiee.gov/usao/eousa/foia_reading_room/usam/title9/ermO0200.htm. (’Virtually every nation vests responsibility forenforcing criminal laws in the sovereign. The othernation may regard an effort by an Americaninvestigator or prosecutor to investigate a crime orgather evidence within its borders as a violation ofsovereignty.").

For example, the legal basis for letters rogatory isthe principle of international comity: "A letterrogatory is a formal request from a U.S. court to theappropriate judicial authorities of another countryrequesting the performance of an act of assistance,which, unless sanctioned by the foreign court, wouldconstitute a violation of the receiving country’ssovereignty." Grand Jury Handbook at 281. As DOJacknowledges: "Documents in the possession offoreign persons over whom a supervising court hasjurisdiction, but which are located abroad, raisedifficult questions of comity and sovereignty. Forexample, courts may decline to require production ofdocuments on comity grounds." United States

11

Department of Justice, Antitrust Division, GrandJury Manual III-11 (1991) ("Grand Jury Manual’),available at http://www.justice.gov/atr/public/guidelines/206696.pdf.

Furthermore, the Special Master and JudgeIllston emphasized in these decisions that theToshiba entities brought the foreign discovery intothe United States solely because they were compelledto do so in the civil discovery that ensued from thegrand jury investigation. App. 6a, 12a-13a.

The Special Master and Judge Illston alsocautioned that "defendants are still guaranteedcertain protections regarding criminal proceedingsand those protections must be safe-guarded, so thatthe government does not overstep its power,intentionally or otherwise." App. 13a. At the sametime, the Special Master and Judge Illston balancedthe interests of civil Plaintiffs in a prompt resolutionof their claims, rather than imposing an indefinitestay of the Class Actions. Thus, these decisionspreserved the "review but not copy" framework andordered the Toshiba entities to produce immediatelythe foreign discovery to civil Plaintiffs in the UnitedStates. The district court did not, however, purportto address the possibility of grand jury subpoenas forthe foreign-origin discovery, saying "[i]f and when theDOJ seeks to enforce existing subpoenas, or issuesnew subpoenas seeking the foreign documents, thematter will then be ripe for decision." App. 10a.

5. DOJ subsequently served grand jurysubpoenas on four law firms representing partiesinvolved in the Class Actions, including White &Case LLP as counsel for the Toshiba entities. The

12grand jury subpoenas sought the foreign-origindocuments and deposition transcripts from the ClassActions. After White & Case moved to quash thesubpoenas under Rule 17(c)(2) of the Federal Rules ofCriminal Procedure, DOJ filed a motion requestingthat Judge Illston be assigned to the motions toquash, which were then transferred to her. Thedistrict court had jurisdiction under 18 U.S.C. § 3231and Rule 17(c).

After full briefing and a hearing, Judge Illstonquashed the grand jury subpoenas, reiterating that"the DOJ’s request for all civil discovery wouldexpand the DOJ’s subpoena power beyond its currentgeographical limits." App. 6a. Judge Illston alsonoted that the foreign-origin documents anddeposition transcripts were present in the UnitedStates solely because of compelled civil discovery inthe Class Actions that had followed the revelation ofDOJ’s grand jury investigation, and in order to obtainsuch materials, DOJ would normally be required toutilize one of the established methods, such as lettersrogatory. App. 7a; Sealed App. 4-5.

Judge Illston also recognized the significant risksto parties involved in criminal investigations withfollow-on civil litigation, as well as DOJ’s role incausing the Class Actions here through the pursuitand eventual public revelation of its grand juryinvestigation. App. 8a; Sealed App. 6.

Additionally, Judge Illston found that there wasno Ninth Circuit precedent controlling the matter:"While there is broad language in Meserge regardingthe power of the grand jury, Meserge did not addressthe grand jury’s authority to subpoena foreign

13

evidence that would otherwise be outside itssubpoena power, or the interplay between criminalgrand jury proceedings and ongoing civil proceedingsinvolving unindicted foreign defendants." App. 7a-8a(citing In re Grand Jury Subpoena Served onMe~erve, Mumper & Hughes, 62 F.3d 1222 (9th Cir.1995)).

6. The Ninth Circuit reversed, holding that JudgeIllston had abused her discretion. App. 2a. Contraryto the fact-intensive, circumstantial inquiry requiredby Rule 17(c)(2) of the Federal Rules of CriminalProcedure, the court of appeals summarily appliedthe per ~e rule from its Me~erve precedent withoutconsideration of any countervailing circumstances:"we apply our per se rule that a grand jury subpoenatakes precedence over a civil protective order." App.3a (citation omitted).

The Ninth Circuit issued its mandate onDecember 22, 2010, and the Toshiba entitiessubsequently agreed to the production of all of theircivil discovery to DOJ, subject to the outcome of thispetition. Sealed App. 1. The Ninth Circuit’s rulingremains of vital and continuing importance becausethe Class Actions, with ongoing civil discovery, andthe grand jury investigation are both live and active.Documents and deposition testimony not yet in theUnited States or within DOJ’s possession are subjectto the Ninth Circuit’s decision. In addition, DOJassured the court below that DOJ would return all ofthe discovery at issue if this Court were to reversethe Ninth Circuit’s decision.

14

REASONS FOR GRANTING THE PETITION

This case squarely presents a recurring andimportant question of federal practice on which sixcircuits have conflicted in reaching an intractablethree-way split: namely, the correct legal standardfor resolving the collision between federal grand jurysubpoenas and civil protective orders. In this case,the Ninth Circuit applied its "per se rule" that grandjury subpoenas always trump civil protective orders,reversing the district court’s order that had quashedthe grand jury subpoenas in favor of the protectiveorder previously entered by the district court. TheFourth and Eleventh Circuits follow the same per serule as the Ninth Circuit.

In contrast, the Second Circuit follows virtuallythe opposite rule that civil protective orders arepresumed to trump grand jury subpoenas absentextraordinary circumstances or compelling need bythe government. Indeed, the Ninth Circuit case firstadopting the per se rule discussed the SecondCircuit’s rule at length and expressly declined tofollow it. It is apparent that this case would havehad the opposite outcome in the Second Circuit (i.e.,affirmance of the district court’s order quashing thegrand jury subpoenas) because DOJ undisputedly didnot exhaust, or even pursue, other means to obtainthe materials constituting the discovery in theparallel civil actions prior to issuing the grand jurysubpoenas.

Furthermore, the First and Third Circuits haveanalyzed the irreconcilable conflict between the perse circuits and the Second Circuit, and have

15

established yet a third position, which presumes thatgrand jury subpoenas take priority over civilprotective orders, but permits that presumption to berebutted based on circumstances. Notably, in carvingout this intermediate position, both the First andThird Circuits expressly declined to follow the per ~erule due to its inflexibility. Thus, six courts ofappeals have reached an open, three-way circuit split,which is ripe for resolution by this Court.

This case demonstrates how important this issuehas become, particularly in high-stakes businessmatters subject to grand jury investigation andparallel (usually follow-on) civil litigation. Forexample, as both DOJ and the district courtacknowledged in this case, a civil deponent’s abilityto rely on a protective order in the face of a loominggrand jury investigation is pivotal: when courtshonor protective orders, a defendant may testify todefend himself in the civil action; otherwise, thedefendant may feel compelled to assert the FifthAmendment privilege against self-incrimination andrisk potentially ruinous adverse inferences forpurposes of civil liability.

The conflicting positions of the courts of appealspresent a similar quandary concerning a civildefendant’s determination whether to producedocuments from outside the United States that wouldotherwise lie beyond the grand jury’s territorialsubpoena authority: if courts respect protectiveorders, a defendant can produce documents and seeka just resolution of the civil case on the meritswithout fear of the government using thesedocuments in a criminal case; otherwise, the civil

16defendant may forgo production and become exposedto harsh consequences including possible default.

As a result of these divergent rules of law, thecollision between a grand jury subpoena and a civilprotective order will be resolved in vastly differentways depending on the jurisdiction. Theseinconsistencies in the application of the FederalRules of Criminal and Civil Procedure encourageforum shopping.

The Ninth Circuit’s decision below exacerbatesthe circuit conflict by bringing into sharp focus theimplications of the per se rule. Indeed, the districtcourt here distinguished the Ninth Circuit’s per serule precisely because a mechanical priority for grandjury subpoenas over civil protective orders wouldenable the government to obtain materials beyondthe reach of its grand jury subpoena power. Thatdistinction was dismissed when the Ninth Circuitheld that its per ~e rule gives precedence to grandjury subpoenas in all circumstances.

I. THE INTERPLAY OF GRAND JURYSUBPOENAS AND CIVIL PROTECTIVEORDERS HAS LED TO AN EXPRESS, THREE-WAY CONFLICT AMONG SIX CIRCUITS.

A. The Per Se Rule Prioritizing Grand JurySubpoenas Over Civil Protective Orders

In the decision below, the Ninth Circuit statedthat "the district court abused its discretion" ingranting Petitioners’ motion to quash DOJ’s grandjury subpoenas in favor of the district court’spreviously entered protective order. App. 2a.Despite the district court’s detailed consideration of

17the circumstances concerning the parallel grand juryinvestigation and class-action cases--including theextraterritorial civil discovery materials produced inreliance on the court’s protective order and otherwiseoutside DOJ’s grand jury subpoena power--the NinthCircuit bluntly held: "we apply our per se rule that agrand jury subpoena takes precedence over a civilprotective order." App. 3a (citing In re Grand JurySubpoenas Served on Meserve, Mumper & Hughes,62 F.3d 1222, 1226-27 (9th Cir. 1995)).

Thus, notwithstanding the Ninth Circuit’sstatement that the district court "abused" itsdiscretion, in truth, the Ninth Circuit concluded thata district court does not have discretion to quash agrand jury subpoena in favor of a civil protectiveorder---even where the very same district judge whoentered the protective order for good cause wasconsidering whether compliance with the subpoenawould be "unreasonable or oppressive" under Rule17(e)(2) of the Federal Rules of Criminal Procedure.

The Ninth Circuit first adopted its per se rule inthe Meserve decision that was relied upon by theNinth Circuit here. Meserve itself expresslydiscussed the then two-way circuit conflict between(i) the Second Circuit rule that prioritizes civilprotective orders over grand jury subpoenas absentextraordinary circumstances or compelling need bythe government, and (ii) the Fourth and EleventhCircuits’ per se rule that prioritizes grand jurysubpoenas over civil protective orders in allcircumstances. Meserye, 62 F.3d at 1223-26 (9th Cir.1995) (citing, inter alia, In re Grand Jury SubpoenaDuees Teeum Dated Apr. 19, 1991, 945 F.2d 1221 (2d

18

Cir. 1991); In re Grand Jury Subpoena, 836 F.2d1468 (4th Cir. 1988) (divided panel); In re Grand JuryProceedings (Williams), 995 F.2d 1013 (llth Cir.1993)).

The Ninth Circuit proceeded in Mese_rve to rejectunequivocally the Second Circuit position and adoptthe per se rule that was dispositive in the outcome ofthis case. Meserve, 62 F.3d at 1226 (9th Cir. 1995)("We adopt the per se rule of the Fourth andEleventh Circuits."). When adopting the per se rule,the Ninth Circuit never reconciled the rigidity of thatapproach with the discretion conferred on districtjudges by Criminal Rule 17(c)(2), or the discretionlikewise underlying a district judge’s prior entry of aprotective order under Civil Rule 26(c). Nor did theNinth Circuit contemplate any other circumstanceswhere a district judge might quash grand jurysubpoenas in favor of a protective order, such as herewhere the civil discovery included materials outsidethe grand jury’s territorial subpoena power.

B. The Second Circuit Rule Prioritizing CivilProtective Orders Over Grand JurySubpoenas

The Second Circuit follows virtually the oppositerule from the per se circuits: "absent a showing ofimprovidence in the grant of a protective order orsome extraordinary circumstance or compelling need,a protective order is enforceable against any thirdparty, including the government." Grand JurySubpoena Duees Tecum Dated Apr. 19, 1991, 945F.2d at 1224 (2d Cir. 1991) (citing Martindell v. Int’l

19

TeI. &TeI. Corp., 594 F.2d 291, 296 (2d Cir. 1979))(emphasis added).

Indeed, the Second Circuit’s decision that firstprioritized a civil protective order over a grand jurysubpoena expressly declined to follow the per se rulethat, at that time, had been adopted by a dividedpanel in the Fourth Circuit. Grand Jury SubpoenaDuces Tecum Dated Apr. 19, 1991, 945 F.2d at 1225(2d Cir. 1991) (holding that the court "respectfullydecline[s] to follow the Fourth Circuit’s apparent perse rule that a grand jury subpoena will always beenforced despite the existence of an otherwise validprotective order").

In rejecting the per se rule, the Second Circuitreasoned: "the government already has ’awesomepowers’ such as subpoenaing a witness to testifybefore a grand jury, which ’render unnecessary itsexploitation of the fruits of private litigation."’ Id. at1224 (quoting Martindell, 594 F.2d at 296 (2d Cir.1979)). The Second Circuit also emphasized theimportant role protective orders play in promotingthe full disclosure necessary for the efficientresolution of civil disputes, id., as well as the strongreliance interest on protective orders that naturallyfollows: "In this case, there is a protective order. Wesee no reason on the record before us not to presume,as we have in the past, that a witness relied on it," id.at 1225 (citing Minpeco S.A. v. ContiCommoditySerw., Inc., 832 F.2d 739, 743 (2d Cir. 1987)).

Thus, the Second Circuit openly created the initialcircuit conflict on the issue presented here. And theSecond Circuit’s steadfast prioritization of civil

20protective orders over grand jury subpoenas remainssettled practice there today. E.g., John Gleeson (U.S.District Judge, E.D.N.Y.), et al., Federal C_rimina]Practice: A Second Circuit Handbook § 45-6 (2010)(acknowledging circuit conflict, then stating: "In theSecond Circuit, to gain access to civil discoverycovered by a protective order, the government mustdemonstrate either ’improvidence’ in granting theprotective order ’or some extraordinary circumstanceor compelling need."’) (quoting Martindell, 594 F.2dat 296 (2d Cir. 1979)). Notably, the Second Circuit’srule is frequently associated with that circuit’sseminal Martindell decision on which the SecondCircuit’s 1991 decision relied, but the 1991 decisionwas the first in that circuit to prioritize a civilprotective order in the precise context of a collisionwith a grand jury subpoena.

Recently, the Tenth Circuit indicated that it maybe headed toward the Second Circuit rule when theTenth Circuit followed Martindell to reverse adistrict court’s modification of a civil protective orderthat provided IRS criminal investigators access todocuments produced in reliance on the protectiveorder. SECv. Merrill Scott & Assoes., Ltd., 600 F.3d1262, 1272-73 (10th Cir. 2010) (relying on Martindell,594 F.2d at 295 (2d Cir. 1979)).

Because it is undisputed here that DOJ failed topursue any alternative means to acquire thematerials constituting the civil discovery (App. 7a-8a), there can be no serious question that this easewould have had the opposite outcome in the SecondCircuit.

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C. A Third Approach: The RebuttablePresumption in Favor of Grand JurySubpoenas

The First and Third Circuits have recognized theconflict between the per se circuits and the SecondCircuit and have taken yet another position thatpresumes that grand jury subpoenas take priorityover civil protective orders, but permits thatpresumption to be rebutted based on circumstances.In re Grand Jury Subpoena (Roach), 138 F.3d 442,445 (lst Cir. 1998) ("Regarding both the Martindellrule and the per se rule as flawed to some extent, wechart a different course. The proper approach, wethink, is along the following lines: A grand jury’ssubpoena trumps a Rule 26(c) protective order unlessthe person seeking to avoid the subpoena candemonstrate the existence of exceptionalcircumstances that clearly favor subordinating thesubpoena to the protective order."); In re Grand Jury,286 F.3d 153, 157-58 (3d Cir. 2002) ("We have notpreviously addressed whether, and under whatcircumstances, a civil protective order may shieldinformation from a grand jury, but our sister circuitshave developed three different approaches to thisproblem .... We join the First Circuit in concludingthat a strong but rebuttable presumption in favor of agrand jury subpoena best accommodates thesweeping powers of the grand jury and the efficientresolution of civil litigation fostered by protectiveorders.").

In rejecting both the per ~e and Second Circuitapproaches, the First and Third Circuits eacharticulated reasoning consistent with Criminal Rule

22

17(c)(2) and the fact-intensive, circumstantial inquiryundertaken by the district court here but rejected bythe Ninth Circuit. See Roach, 138 F.3d at 445 (1stCir. 1998) ("How this presumption in favor of a grandjury subpoena plays out in each individual case willdepend upon the particular facts and circumstances.When called upon to adjudicate a motion to quash agrand jury subpoena in the face of a civil protectiveorder, a district court may mull factors such as thegovernment’s need for the information (including theavailability of other sources) .... ") (emphasisadded); In re Grand Jury, 286 F.3d at 162 (3d Cir.2002) (adopting First Circuit factors, the first ofwhich being "the government’s need for theinformation (including the availability of othersources)").

Furthermore, the First and Third Circuitsidentified a "vice" in the per se rule~its completelack of flexibility to consider important case-specificcircumstances that could tip the balance in favor ofenforcing a protective order against a grand jurysubpoena:

[The per se rule] overlooks that thebalance nonetheless is variable and thatthe confluence of the relevant interests--generally, those of society at large andof the parties who are seeking to keep acivil protective order inviolat~occasionally may militate in favor ofblunting a grand jury’s subpoena.

Roach, 138 F.3d at 445 (lst Cir. 1998), quotedin In reGrand Jury, 286 F.3d at 162 (3d Cir. 2002).

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The express three-way circuit conflict on the issuepresented in this case has been acknowledged insecondary authorities. E.g., 2 Charles Alan Wright &Peter J. Henning, Federal Practice and Procedure:Criminal § 276 (4th ed. 2010) ("The circuits differ onthe rule to be applied when a grand jury subpoenaseeks material covered by a protective order in a civilcase," and noting the three approaches); ABA Sectionof Antitrust Law, Antitrust Law Developments 956(6th ed. 2007) ("A split among several circuit courtsexists, however, as to whether a grand jury subpoenatakes precedence over a Rule 26(c) protective order.").

Nearly half of the nation’s courts of appeals haveweighed in with three intractable positions,demonstrating the recurring importance of the issue.The courts of appeals are at an impasse that requiresresolution by this Court.

II. THE INTERPLAY OF GRAND JURYSUBPOENAS AND CIVIL PROTECTIVEORDERS IS A PIVOTAL ISSUE,PARTIC~LY IN HIGH-STAKES BUSINESSCASES, AND REQUIRES A UNIFORM RULETO PREVENT FORUM SHOPPING.

As the district court in this case observed: "Itoften happens that civil cases are filed on the heels ofan announcement about a criminal grand juryinvestigation .... " App. 8a. Indeed, this case is oneof many recent multi-district, class-action antitrustcases that have proceeded in parallel with relatedgrand jury investigations:

24(i) In re Refrigerant Compressors Antitrust

Litig., No. 2:09-md-02042 (E.D. Mich. filed~lune 9, 2009);

(ii) In re Processed Egg Prods. Antitrust Litig.,No. 2:08-md-02002 (E.D. Pa. filed Dee. 2,2008);

(iii) In re Mun. Derivatives Antitrust Litig., No.1:08-md-01950 (S.D.N.Y. filed June 18,2oo8);

(iv) In re Graphics Processing Units AntitrustLitig., No. 3:07-md-01826. (N.D. Cal. filedApr. 20, 2007);

(v) In re Air Cargo Shipping Servs. AntitrustLitig., No. 1:06-md-01775 (E.D.N.Y. filed~lune 27, 2006); and

(vi) In re Hydrogen Peroxide Antitrust Litig.,No. 2:05-md-01682 (E.D. Pa. filed June 17,2005).

This dynamic of concurrent class-action eases andgrand jury investigations is not limited to antitrusteases. Other examples include:

(i) 8eeur/ta’es ea~se~. In re Wash. Mutual, Inc.See. Litig., No. 2:08-md-1919 (W.D. Wash. filedFeb. 21, 2008) (securities class action concurrentwith grand jury investigation of same conduct);Caiafa v. Comverse Teeh., Inc., No. 1:06-ev-01825(E.D.N.Y. filed Apr. 19, 2006), and United Statesv. Alexander, No. 06-er-00628 (E.D.N.Y. filedSept. 20, 2006) (indictment for conduct at issue inCaiafa class action); In re Broadeom Corp.Derivative Litig., 2:06-ev-03252 (C.D. Cal. filed

25May 25, 2006), and United States v. Nicholas,8:08-cr-00139 (C.D. Cal. filed June 4, 2008)(indictment for conduct at issue in Broadeom classaction); Newby v. Enron Corp., 4:01-ev-03624(S.D. Tex. filed Oct. 22, 2001), and United Statesv. Causey, No. 4:04-er-00025 (S.D. Tex. filed Jan.21, 2004) (indictment for conduct at issue inEnron class action);

(ii) p~oduct liability, case~. Toyota Motor Corp.,Annual Report (Form 20-F), at 46-47 (June 25,2010) (disclosing the existence of grand juryinvestigation and 200 related putative classactions concerning alleged unintendedacceleration defects), available athttp ://see. gov/Arehive s/e dgar/data/1094517/000119312510146673/d20f.htm; In re Pet Food Prods.Liab. Litig., No. 1:07-ev-02867 (D.N.J. filed June20, 2007) (class action related to adulterated foodproduct concurrent with grand jury investigationof same conduct); and

(fii) Foreign Corrupt .Pz’actz’ces Act cases:.Aluminum Bahrain B.S.C. v. Sojitz Corp., No.4:09-cv-04032 (S.D. Tex. filed Dee. 18, 2009) (civilaction alleging bribery by a Japanese corporationconcurrent with criminal investigation of sameconduct); In re Willbros Group, Inc. See. Litig.,No. 05-ev-1778 (S.D. Tex. filed May. 18, 2005), andUnited States v. Steph, No. 4:07-er-00307 (S.D.Tex. filed July 19, 2007) (criminal indictment forconduct at issue in Willbros class action).

In all of these eases, and the scores of others likethem, the interplay of grand jury subpoenas and civil

26protective orders is a crucial issue that mayfundamentally affect the course and outcome of theparallel criminal and civil matters. For example, acivil deponent who can rely on a protective order tomaintain the confidentiality of his testimony is in anentirely different position from the deponent whomust choose between potential self-incrimination andthe potentially ruinous adverse inferences that canfollow from an assertion of the Fifth Amendment.Compare, e.g., In re Grand Jury, 286 F.3d at 161 (3dCir. 2002) ("deponents who have reason to fear notjust embarrassment or economic disadvantage, butpossible criminal charges as well, should be awarethat a protective order alone cannot protect themfrom a grand jury investigation"), with Grand JurySubpoena Duces Tecum Dated Apr. 19, 1991, 945F.2d at 1225 (2d Cir. 1991) ("we have upheld the useof protective orders limiting disclosure of potentiallyincriminating testimony where parties havevoluntarily consented to testify in civil eases inreliance upon such protective orders") (citation andinternal quotation marks omitted) (emphasis inoriginal). The differing circuit rules createinequitable results for defendants in differentlocations.

Similarly, in the context of document discovery,defendants in certain circuits may be forced to risksanctions or default in civil eases to fully assert theircriminal defense rights, while defendants in othercircuits can avoid such problems. Such divergentoutcomes in different circuits are not in the interestsof justice. Discouraging compliance with discovery

27

requests reduces the likelihood that civil cases will bedecided fairly.

The per se rule necessarily leads to anothertroubling distortion of civil litigation: class actionplaintiffs in the per se circuits will know that overlybroad discovery requests will expose defendants togreater risks in a parallel criminal investigation,thereby multiplying plaintiffs’ leverage in the civilaction. This is exactly the type of "in terroremincrement of the settlement value" that this Courtrecognized as problematic in TwombIy, 550 U.S. at558 (2007) (citation and internal quotation marksomitted). As this Court has observed, such collateralconsequences of broad civil discovery can causedefendants "to settle even anemic cases." Id. at 559.

The unavoidable byproduct of this lack ofuniformity is a perhaps irresistible temptation forplaintiffs and prosecutors to forum shop. The per ~ejurisdictions are the most desirable for plaintiffs andprosecutors alike. But "[o]ne of the shaping purposesof the Federal Rules is to bring about uniformity inthe federal courts .... " Hanna y. PIur~er, 380 U.S.460, 472 (1965) (citation and internal quotationmarks omitted).

For example, all other things being equal, whywould a prosecutor not choose a forum where thegovernment could assuredly commandeer all civildiscovery, including foreign materials otherwisebeyond the government’s subpoena power, versus aforum lacking that potentially decisive advantage?Notably, the DOJ Antitrust Division’s own manualgives prosecutors broad discretion in deciding where

28

to empanel grand juries, and the relevantconsiderations include the "potential difficulties inconducting grand juries in particular jurisdictions."United States Department of Justice, AntitrustDivision, A~titrust Division Manua] III-88 (4th ed.2008), avai]ab]e at http://www.justice.gov/atr/public/divisionmanual/chapter3.pdf. Thus, particularly incases of national importance, DOJ can choose amongthe per se circuits, the intermediate circuits or theSecond Circuit. Indeed, it appears that DOJ couldchoose to have a grand jury subpoena issue from aper se forum to defeat a protective order enteredelsewhere, as any motion to quash the subpoenawould be heard in the district court where thesubpoena issued. See Fed. R. Crim. P. 17(c)(2);United States v. (Under Seal), 714 F.2d 347, 350 (4thCir. 1983) ("The power to quash a subpoena exists inthe district court of the district where the grand jurysits by reason of its inherent authority to preventmisuse of its own process.").

Similarly, civil plaintiffs will seek to file in per sejurisdictions to maximize their leverage overdefendants by unquestionably rendering any civildiscovery subject to grand jury subpoena, which mayraise the risk of default.

For these reasons, this fully developed conflictamong six circuits on a pivotal issue for so manyimportant business eases is an exceedingly worthycandidate for this Court’s attention and resolution.

29

III. THE NINTH CIRCUIT’S DECISIONEXACERBATES THE CIRCUIT CONFLICTBY ENABLING FEDERAL PROSECUTORSTO CIRCUMVENT TERRITORIALLIMITATIONS ON GRAND JURYSUBPOENA AUTHORITY.

A. The Ninth Circuit’s decision in this caseexacerbates the circuit conflict by enabling DOJ,apparently for the first time in a reported case, tocircumvent the U.S. territorial limitations on grandjury subpoena authority. Before the district courtand the Ninth Circuit, DOJ disputed that it wasextending its jurisdictional reach or offending foreignsovereignty, arguing that it was seeking civildiscovery that had been brought into the UnitedStates and thus within DOJ’s jurisdictional reach.This argument failed to account for three importantcircumstances: (i) there is no dispute that the foreigndocuments in question were generated andmaintained entirely overseas in the normal course ofbusiness; (ii) DOJ never attempted to obtain thesedocuments through letters rogatory, an MLAT ordiplomatic channels; and (iii) DOJ sought to exploitcivil discovery to obtain what DOJ could not obtaindirectly by grand jury subpoena.

The district court here appreciated these specialcircumstances and rejected DOJ’s argument thatsubpoenaing the civil discovery would not circumventthe territorial limitations on grand jury subpoenapower. Indeed, the district court distinguished theNinth Circuit’s pe~" se rule precisely to avoid thatoutcome:

3O

While there is broad language inMeserve [i.e., the Ninth Circuitprecedent adopting the per ~e rule]regarding the power of the grand jury,Me~erve did not address the grandjury’s authority to subpoena foreignevidence that would otherwise beoutside its subpoena power, or theinterplay between criminal grand juryproceedings and ongoing civilproceedings involving unindictedforeign defendants. It often happensthat civil cases are filed on the heels ofan announcement about a criminalgrand jury investigation, and relatedforeign-based evidence and depositionsmay be present in the United Statessolely because of the civil discovery.

App. 7a-8a.

The district court also noted that "It]he criticalissue is whether allowing the DOJ to have copies offoreign discovery brought into the United Statesunder court order does indeed grant to the UnitedStates foreign discovery that would otherwise beoutside the grand jury’s subpoena power." App. 6a(citations and internal quotation marks omitted)(emphasis in original).

The Ninth Circuit, however, held that theseimportant circumstantial issues were irrelevantunder the inflexible per se rule. That holding, whichwould not have followed in either the Second Circuitor the circuits following the intermediate rule, has

31

serious implications under the foreign-sovereigntyand international-comity principles that dictate thelimitations on the government’s extraterritorialsubpoena power in the first place. See Grand JuryManual III-11 ("Documents in the possession offoreign persons over whom a supervising court hasjurisdiction, but which are located abroad, raisedifficult questions of comity and sovereignty.").

In the Ninth Circuit and the other per se circuits(Fourth and Eleventh), prosecutors can now sidestepthe settled international methods for obtainingevidence from abroad--letters rogatory, MLATs anddiplomatic channels---in favor of a grand jurysubpoena for the entire discovery record from aparallel civil action. This significant departure fromsettled practice is not one of form over substancebecause the internationally accepted methods forobtaining foreign evidence require not only notice tothe applicable foreign sovereign, but a substantivedetermination by that sovereign as to whether thematerials should be produced: "A letter rogatory is aformal request from a U.S. court to the appropriatejudicial authorities of another country requesting theperformance of an act of assistance, which, unlesssanctioned by the foreign court, would constitute aviolation of the receiving country’s sovereignty."Grand Jury Handbook at 281.

Because the per so circuits’ interpretation of theFederal Rules of Criminal and Civil Procedureenables DOJ to circumvent internationally acceptedmethods for a sovereign’s request for evidence--including another sovereign’s right to refuse---thatinterpretation should be avoided under the

32

"prescriptive comity" rule of construction. See, e.g.,F. Hoffmann-LaRoche Ltd. v. Empagran S.A., 542U.S. 155, 164 (2004) ("[T]his Court ordinarilyconstrues ambiguous statutes to avoid unreasonableinterference with the sovereign authority of othernations.").

Furthermore, this circumvention of the settledinternational methods for governments to obtainevidence is particularly problematic in areas wherethe applicable foreign sovereign does not share theenforcement or regulatory views of the UnitedStates. See Restatement (Third) of ForeignRelations Law of the United States § 442 reporter’sn.1 (1987) ("To a considerable extent, the hostility toUnited States discovery practice reflects dislike ofaspects of substantive American law, notably UnitedStates antitrust law and laws providing forregulation of international shipping.").

DOJ’s circumvention of established methods is allthe more troubling because DOJ exploited civiljurisdictional devices never intended to be used inthe criminal context to further its grand juryinvestigation. The Hague Convention "is amultilateral treaty .... [that] provide[s] a simplerway to serve process abroad, to assure thatdefendants sued in foreign jurisdictions wouldreceive actual and timely notice of suit, and tofacilitate proof of service abroad." VolkswagenwerkAktiengesellschaft v. Schlunk, 486 U.S. 694, 698(1988). The Hague Convention, however, expresslyapplies only in civil eases. See id. at 699 (noting thatArticle 1, which states that the "Convention shall

33

apply in all cases, in civil or commercial matters,"defines the scope of the convention).

Here, in the Class Actions, the district courtperfected specific personal jurisdiction over theToshiba entities from Japan through the HagueConvention. Thus, by taking the Toshiba entities’civil discovery for the grand jury investigation, DOJexploited civil jurisdictional and discovery rules,neither of which were ever intended to be used in thecriminal context. Under the per se rule, courtsapparently do not have the discretion to remedy thisuntoward result.

DOJ’s disregard of sovereignty, comity and dueprocess inevitably provokes concern about reciprocaltreatment of U.S. natural and legal persons, amongother reverberations. C£, e.g., Brief for the UnitedStates as Amicus Curiae Supporting Petitioners at12, Goodyear Luxembourg Tires, S.A.v. Brown, (No.10-76) (U.S. filed Nov. 19, 2010) ("Decisions like theone at issue here may dissuade foreign companiesfrom doing business in the United States, therebydepriving United States consumers of the fullbenefits of foreign trade. Conversely, a UnitedStates corporation concerned about facing a similarrule abroad might be equally dissuaded fromexporting its products."); United States Departmentof State, Enforcement of Judgments (emphasizingthat the United States has failed to conclude abilateral treaty or multilateral convention with "anyother country on reciprocal recognition andenforcement of judgments[,]" largely because "foreigncountries have objected to the extraterritorialjurisdiction asserted by courts in the United

34States."), http://travel.state.gov/law/judiciaYjudicial_691.html (last visited Feb. 23, 2011).

B. The inability of the per se rule to preventcircumvention of the territorial limitations on DOJ’sgrand jury subpoena power has special implicationsin international cartel matters. The European Unionand numerous individual countries on six continentshave adopted antitrust regimes at least somewhatmodeled on the antitrust amnesty programadministered by DOJ in the United States: todestabilize cartels, the regulators provide some formof leniency to companies who self-reportanticompetitive conduct. To further encourage suchself-reports, the regulators almost always promise tomaintain the confidentiality of the informationsubmitted to them by a leniency applicant. Suchself-reports sometimes occur in multiple jurisdictionsaround the world, and companies will also selectivelyself-report in some jurisdictions but not others.

In the United States, follow-on, class-actionplaintiffs now routinely seek in discovery leniencyapplications or leniency statements that weresubmitted by civil defendants to foreign regulators.In the parallel Class Actions, for example, Plaintiffscurrently are seeking such leniency applications thatmay have been submitted by other Defendants to theEuropean Commission and the Japan Fair TradeCommission. The European Commission hasappeared specially in the litigation to object to suchdiscovery:

The leniency program is the mosteffective tool at the Commission’s

35

disposal for the detection of cartels. Itssuccess is crucially dependent on thewillingness of companies to providecomprehensive and candid information.This willingness could disappear ifpotential leniency applicants wouldknow that their corporate statementscould become discoverable in civillitigation. The discoverability ofcorporate leniency statements in civillitigation could lead to the incongruousresult that a cartel member that haschosen to cooperate with theCommission could wind up being in aworse position--with regard to civilclaims--than those cartel members thathave refused to cooperate.

Letter from the Director General of the DirectorateGeneral for Competition, European Commission, tothe Hen. Susan Y. Illston at 6, In re TFT-LCD (FiatPanel) Antitrust Litig., No. 3:07-md-1827 SI (N.D.Cal. Feb. 15, 2011) (ECF No. 2450) ("EC Letter").The Japan Fair Trade Commission has filed asimilar objection that such disclosure wouldundermine the agency’s leniency program. SeeLetter from the Director General of the InvestigativeBureau, Japan Fair Trade Commission, to Hen.Susan Y. Illston, In re TFT-LCD (Fist PaneI)Antitrust Litig., No. M:07-1827 SI (N.D. Cal. Feb. 3,2011) (ECF No. 2392).

Notably, the European Commission expresslystated that it lacked the resources to intervene everytime the issue arises: "it is not possible for the

36

Commission to intervene as amicus curiae in variousjurisdictions around the world where disclosure ofdocuments from its investigative file is oftenrequested." EC Letter at 8. Thus, such non-U.S.regulators effectively must depend on civildefendants to raise and win such objections, but suchdefendants are not well-positioned to assert thesovereign rights and interests of foreign regulatorsand such materials have been produced in civildiscovery--almost always subject to a protectiveorder, however. E.g., Emerson Elec. Co. v. LeCarbone Lorraine, S.A., No. 05-6042 (JBS), 2008 WL4126602, at *8 (D.N.J. Aug. 27, 2008) (grantingmotion to compel documents referring and relating toEC decision against Defendant).

The per se rule gives U.S. prosecutors carteblanche to pierce protective orders to obtain suchleniency materials produced in civil discovery thatthe prosecutors would not be able to obtain directlyfrom foreign regulators (absent the consent of theself-reporting company). This outcome underminesthese leniency programs for the reasons stated by theEuropean Commission and Japan Fair TradeCommission--but for greater reason given the addeddimension of U.S. criminal exposure. In other words,because of the per se rule, when a company applies toa foreign regulator for leniency, the leniencymaterials will be subject to grand jury subpoena byDOJ, thereby automatically exposing that companyto U.S. criminal liability.

In F. Hoffmann-LaRoche Ltd. v. Empagran S.A.,542 U.S. 155, 168 (2004), the United States,Belgium, Canada, Germany, Japan, the Netherlands,

37and the United Kingdom participated as amiei curiaeon the merits arguing that this Court shouldconsider the disincentive that U.S. civil liability forantitrust offenses unrelated to the United Stateswould have on self-reporting. See, e.g., Brief for theUnited States as Amicus Curiae SupportingPetitioners at 20, F. Hoffmann-LaRoche Ltd. v.Ernpagran S.A., 542 U.S. 155 (2004) (No. 03-724)("The court of appeals’ interpretation would tilt thescale for conspirators against seeking amnesty byexpanding the scope of their potential civilliability.").

The regulators’ point in Empagran applies withgreater force if leniency applicants must consider notonly civil liability in the United States but exposureto U.S. criminal liability because U.S. district judgesare not permitted the discretion to uphold protectiveorders on leniency materials produced in civillitigation.

The issue squarely presented by this petition hasdivided the courts of appeals. These inconsistentrules of law have led to unacceptable andunpredictable results for litigants who wish to defendcivil cases on the merits in reliance on a protectiveorder and who are served with grand jury subpoenas.These inconsistent results are particularly troublingfor parties in complex business cases, where thescope of discovery is broad and the costs areenormous. The Ninth Circuit’s decision also enablesprosecutors to circumvent the territorial limitationson grand jury subpoena authority, with resulting

38

implications for foreign sovereignty and internationalcomity.

CONCLUSION

The petition for a writ of certiorari should begranted.

JOHN H. CHUNGMARTIN M. TOTOWHITE & CASE LLP1155 Ave. of the Americas WHITE ~ CASE LLPNew York, NY 10036 701 Thirteenth St., N.W.(212) 819-8200 Washington, DC 20005

(202) 626-3600ccurran@whitecase.com

Respectfully submitted.

CHRISTOPHER M. CURRANCounsel of Record

ERIC GRANNON

Counsel for Petitioner

FEBRUARY 25, 2011