In an investigation of U.S.
antitrust activities with international implications, Third Circuit holds that
only evidence of joint U.S.-foreign prosecution implicates Fifth Amendment
protection abroad
This case focuses on the impact
on the Fifth Amendment privilege of United States v. Balsys, 524 U.S. 666
(1998) [see 1998 Int'l Law Update 81]. The appellants in this case are
immunized witnesses who have refused to testify before a grand jury. Because
this case involves the international aspects of an antitrust investigation,
they alleged that foreign governments may prosecute them and that their case
thus falls within the alleged Balsys "test."
In 1997, a special grand jury in
New Jersey started looking into anti-competitive activities in the artificial
sausage-casings industry. Among the targets of the investigation were certain
employees of one of the companies involved. The employees testified pursuant to
a subpoena and to an immunity order from the district court.
While they did speak about their
U.S. business, the employees refused to testify about events that related to
foreign markets or that took place outside the U.S. The appellants pointed to
the various antitrust agreements that the U.S. has concluded with other
countries. In particular, they noted that the U.S. Antitrust Division had
searched for evidence in Canada, Spain, the United Kingdom, Germany, Mexico and
other countries.
The district court held the
appellants in contempt and the U.S. Court of Appeals for the Third Circuit
affirms. The Third Circuit finds that the Supreme Court's opinion does not
amount to a "test" for when possible foreign prosecution invokes
Fifth Amendment protection. It held that the prospect of purely foreign
prosecution lay outside the scope of the Fifth Amendment.
In Balsys, the Government sought
the testimony of an individual who had served in the Lithuanian Army during the
Second World War. He refused to testify, alleging fear of prosecution in
Lithuania, Israel and Germany. The Supreme Court ruled that the fear of foreign
prosecution, without a showing of joint action with the U.S., was not enough to
invoke Fifth Amendment protection. The mere fact that the government contacts
foreign nationals or requests documents from foreign countries does not amount
to "joint prosecution" within the meaning of Balsys.
"...[T]he fact that other
nations have enacted criminal antitrust laws does not dictate a conclusion that
nations are acting in concert through a system of complementary substantive
offenses, particularly where a number of the nations in which appellants claim
they face prosecution in fact do not criminalize price fixing, have never had a
successful criminal antitrust investigation or have never utilized the criminal
antitrust provisions, or enforce antitrust violations through administrative
proceedings."
"The authorities that
appellants cite ... may indicate that such a case might present itself to us at
some point in the future, but we view appellants' argument as urging a 'what
if' scenario rather than a true case of an ongoing or imminent international
'cooperative prosecution' that would warrant our viewing foreign activity as
part of a domestic prosecution." [Slip op. 16-17]
The joint international efforts
noted by the Appellants failed to meet that standard.
Citation: In Re:
Impounded, No. 98-6498 (3rd Cir. May 13, 1999).
*** K. Todd Wallace is an attorney at Wallace Meyaski in New Orleans. He has nearly 20 years of experience in the legal and business professions with established excellence in trial advocacy, negotiation, strategic and initiative planning, government relations, mergers and acquisitions, and team building. See http://www.walmey.com/our-attorneys/k-todd-wallace/
