The opinion of the court was delivered by: GREENE
The motions before the Court address the Court's jurisdiction and they raise fundamental issues concerning the discovery that should govern the future path of this antitrust litigation. A recapitulation of the history of this case will be helpful to an understanding of these issues.
The complaint was filed on November 20, 1974. It alleges violations of Section 2 of the Sherman Act, 15 U.S.C. § 2, by the American Telephone and Telegraph Company (AT&T),
Western Electric Company, Inc. (Western Electric),
and Bell Telephone Laboratories, Inc. (Bell Labs).
In sweeping language the complaint alleges that an unlawful combination and conspiracy exists and has existed for many years among the defendants and certain co-conspirators (primarily the Bell Operating Companies),
designed to permit AT&T to maintain control over Western Electric, Bell Labs, and the Bell Operating Companies; to restrict competition from other telecommunications
systems and carriers and from other manufacturers and suppliers of telecommunications equipment; and to cause Western Electric to supply substantially all the telecommunications requirements of the Bell System.
The complaint explains that the defendants are violating the antitrust laws by various monopolistic practices, including the refusal to sell terminal equipment to subscribers of Bell System telecommunications service, the creation of obstructions to the interconnection of various carriers with the Bell System, and the maintenance of a monopolistic manufacturing and purchasing relationship between Western Electric and the Bell System. It is further alleged that, as a consequence of these practices (1) defendants have achieved and are maintaining a monopoly of telecommunications service and equipment; (2) competition in these areas has been restrained; and (3) purchasers of telecommunications service and equipment have been denied the benefits of a free and competitive market. Among other relief, the action seeks the divestiture by AT&T of all Western Electric stock; the separation of some or all of the Long Lines Department of AT&T from the Bell Operating Companies; the divestiture by Western Electric of its manufacturing and other assets sufficient to insure competition in the manufacture and sales of telecommunications equipment; and such relief against Bell Labs as the Court may find appropriate.
Defendants' Answer, and the Court sua sponte, raised two threshold defenses: (1) that a decree entered in 1956 by the U.S. District Court for the District of New Jersey (United States v. Western Electric Co., Civil Action No. 17-49 (D.N.J. 1956)) is res judicata, and (2) that the matters complained of by the government are within the exclusive jurisdiction of the Federal Communications Commission and therefore immune from scrutiny under the antitrust laws. On October 1, 1976, the Court rejected the claim of res judicata, and on November 24, 1976, it ruled that defendants do not possess blanket immunity from antitrust liability by virtue of the Communications Act of 1934 or their regulation by the Federal Communications Commission. In rejecting the plea that the FCC has exclusive jurisdiction over the subject matter of this litigation, the Court further stated, however, that it might in the future refer particular issues to the Commission under the so-called doctrine of primary jurisdiction. United States v. Am. Tel. & Tel. Co., 427 F. Supp. 57 (D.D.C. 1976, Waddy, J.), cert. denied, 429 U.S. 1071 (1977), cert. denied, No. 77-1009 (D.C. Cir. May 27, 1977), cert. denied, 434 U.S. 977 (1977).
These controversies became moot in relatively short order, as the course of discovery was stayed pending resolution of the jurisdictional issues.
Eventually, and contemporaneously with its ruling on these issues, the Court issued an order vacating the stay that had been in effect for almost 22 months,
andshortly thereafter, pursuant to stipulation of the parties, it issued a number of other pretrial orders, which established machinery for the recommencement of discovery.
Almost immediately upon the entry of these orders, defendants sought review of the Court's ruling on the jurisdictional issues by petitioning both the U.S. Court of Appeals and the U.S. Supreme Court for writs of certiorari,
and during the pendency of these petitions in the appellate courts, all proceedings in this Court, including discovery, were again stayed, this time, with one brief interruption, from January 25, 1977, to November 28, 1977.
When the last certiorari petition was denied, and the stays were dissolved, the parties filed a number of proposed orders concerning pretrial discovery,
and the Court, by its order of February 7, 1978, referred the case to Magistrate Lawrence S. Margolis to direct the preparation of a discovery schedule (see p. 55, infra). At the same time, it denied two pretrial orders (Nos. 9 and 12) submitted by defendants which again raised the issue of the Court's jurisdiction; denied proposals for pretrial orders (Nos. 10 and 11) which would have dealt "in various ways with documents generated in private antitrust proceedings in which AT&T is a defendant; and referred to the Magistrate defendants' proposed Pretrial Order No. 13 whichwould have established that all agencies and departments of the United States government are party plaintiffs in this suit for purposes of discovery. All of these matters, which are still pending, are discussed in detail below.
Pursuant to the authority vested in him by the Court, Magistrate Margolis on April 27, 1978, issued two discovery orders.
Defendants objected to the second of these orders, and appealed it to the Court (28 U.S.C. § 636(b) (1) (A)) which approved a provision establishing a mechanism for the voluntary production of documents from government agencies, but otherwise stayed the effect of the order.
Since that time, there has been little activity,
and such discovery as has been attempted has been the subject of intense controversy.
The case was assigned to this Court on June 22, 1978. On July 6, 1978, the parties were directed to file status memoranda on all outstanding issues, and on August 21, 1978, argument was heard on these matters.
While these issues arose in varying procedural contexts, they may conveniently be discussed under four headings: (1) jurisdiction, (2) the nature of the plaintiff, (3) the government's effort to secure access to documents collected in several private antitrust suits brought against defendants in other districts, and (4) the future course of this action, including the scheduling of proceedings and the authority of the Magistrate and the Special Masters.
Telecommunications carriers clearly do not enjoy an express statutory immunity from antitrust enforcement with respect to the activities here involved. While Congress has not hesitated in so many words to exempt the practices of other industries from the antitrust laws,
and while it has statutorily exempted some activities of telephone companies from those laws,
it has not done so with respect to the conduct which is the subject matter of this complaint. Likewise, defendants have cited nothing in the legislative history of the statutes regulating the telecommunications industry which would lead to the conclusion that an antitrust immunity was contemplated when those statutes were enacted. Thus, if the Court lacks jurisdiction, it could only be because defendants enjoy an immunity by implication, resulting from an incompatibility between the antitrust laws and the statutes which regulate the telecommunications industry.
The problem created by the tension between the antitrust laws and economic regulation has been long recognized. See, e.g., United States v. Trans-Missouri Freight Association, 166 U.S. 290, 41 L. Ed. 1007, 17 S. Ct. 540 (1879); 2 A. Kahn, The Economics of Regulation: Principles and Institutions 1, 4-5 (1971). Broadly speaking the antitrust laws are rooted in the proposition that the public interest is best protected by competition, free from artificial restraints such as price-fixing and monopoly.
The theory of regulation, on the other hand, presupposes that with respect to certain areas of economic activity the judgment of expert agencies may produce results superior to those of the marketplace,
and that for this reason competition in a particular industry will not necessarily serve the public interest.
Because of these divergent objectives, it could be, and has been, argued that whenever the Congress has established a scheme of regulation through an independent commission, it must be deemed to have determined that the antitrust laws should not apply to the industry thus being regulated. That, however, is not the law.
The Supreme Court has repeatedly noted that "repeals of the antitrust laws by implication from a regulatory statute are strongly disfavored, and have only been found in cases of plain repugnancy between the antitrust and regulatory provisions." Otter Tail Power Co. v. United States, 410 U.S. 366, 373, 35 L. Ed. 2d 359, 93 S. Ct. 1022 (1973), quoting United States v. Philadelphia National Bank, 374 U.S. 321, 10 L. Ed. 2d 915, 83 S. Ct. 1715 (1963). Accord, Federal Maritime Commission v. Seatrain Lines, Inc., 411 U.S. 726, 733, 36 L. Ed. 2d 620, 93 S. Ct. 1773 (1973); Merrill Lynch, Pierce, Fenner & Smith v. Ware, 414 U.S. 117, 126, 38 L. Ed. 2d 348, 94 S. Ct. 383 (1973); Carnation Co. v. Pacific Westbound Conference, et al., 383 U.S. 213, 217-8, 15 L. Ed. 2d 709, 86 S. Ct. 781 (1966); Silver v. New York Stock Exchange, 373 U.S. 341, 357-8, 10 L. Ed. 2d 389, 83 S. Ct. 1246 (1963); United States v. Borden Co., 308 U.S. 188, 198-9, 84 L. Ed. 181, 60 S. Ct. 182 (1939).
Regulated industries "are not per se exempt from the Sherman Act" ( Georgia v. Pennsylvania R. R. Co., 324 U.S. 439, 456, 89 L. Ed. 1051, 65 S. Ct. 716 (1945)),
and they are not necessarily exempt even if the conduct complained of in an antitrust context has been expressly approved by the agency charged with regulating the particular industry.
In United States v. Radio Corporation of America, 358 U.S. 334, 3 L. Ed. 2d 354, 79 S. Ct. 457 (1959), a decision by the Federal Communications Commission specifically approving an exchange of television stations was asserted as a defense to an antitrust divestiture action. The Supreme Court rejected that contention, holding, as Mr. Justice Harlan expressed it in his concurring summary of the Court's decision (358 U.S. at 353), "a Commission determination of 'public interest, convenience, and necessity' cannot either constitute a binding adjudication upon any antitrust issues that may be involved in the Commission's proceeding or serve to exempt a licensee pro tanto from the antitrust laws. . . ."
See also California v. Federal Power Commission, 369 U.S. 482, 8 L. Ed. 2d 54, 82 S. Ct. 901 (1962); United States v. Philadelphia National Bank, supra ; Otter Tail Power Co. v. United States, supra.
These principles have been applied to the area of jurisdiction of the Federal Communications Commission ( United States v. Radio Corporation of America, supra) and to telephone companies specifically. E.g., Industrial Communications Systems, Inc. v. Pacific Tel. & Tel., 505 F.2d 152, 156 (9th Cir. 1974); International Tel. & Tel. v. General Telephone & Electronics Corp., 351 F. Supp. 1153, 1182 (D. Hawaii, 1972), aff'd. in part and rev'd. in part, 518 F.2d 913, 918-20 (9th Cir. 1975); Macom Products Corp. v. Am. Tel. & Tel. Co., 359 F. Supp. 973 (C.D. Cal. 1973).
Regulated conduct is, however, deemed to be immune by implication from the antitrust laws in two
relatively narrow instances: (1) when a regulatory agency has, with congressional approval, exercised explicit authority over the challenged practice itself (as distinguished from the general subject matter) in such a way that antitrust enforcement would interfere with regulation ( Pan American World Airways v. United States, 371 U.S. 296, 9 L. Ed. 2d 325, 83 S. Ct. 476 (1963); Gordon v. New York Stock Exchange, 422 U.S. 659, 45 L. Ed. 2d 463, 95 S. Ct. 2598 (1975); United States v. National Association of Security Dealers, 422 U.S. 694, 45 L. Ed. 2d 486, 95 S. Ct. 2427 (1975)), and (2) when regulation by an agency over an industry or some of its components or practices is so pervasive that Congress is assumed to have determined competition to be an inadequate means of vindicating the public interest. Otter Tail Power Co. v. United States, supra, 410 U.S. at 373-78; United States v. National Association of Security Dealers, supra ; Silver v. New York Stock Exchange, supra.
Gordon v. New York Stock Exchange, supra, upon which defendants heavily rely, and United States v. National Association of Security Dealers (NASD) , supra, decided the same day, are the most recent Supreme Court expressions on the kind of analysis that must be applied in determining when an antitrust suit will lie against a member of a regulated industry.
Gordon was an action brought by small investors who challenged a system of fixed stock exchange commission rates sanctioned by the SEC. In its decision, the Court reaffirmed what it had held many times before: that repeal of the antitrust laws is not favored; that repeal will be implied only where there is a plain repugnancy between antitrust and regulatory provisions and then only to the minimum extent necessary; that in the absence of regulatory supervision there can be no conflict; and that both the presence of a pervasive regulatory scheme and the existence of regulatory action under a specific regulatory provision are factors in finding a repeal of the antitrust laws by implication (422 U.S. at 682-689). The Court then went on to find regulation by the SEC to be such regulatory action, and section 19(b)(9) of the Securities Exchange Act of 1934, 15 U.S.C. § 785(b), which grants to the Commission review power over the fixing of commission rates, to be such a specific regulatory provision.
The Court indicated that in making that determination it was heavily influenced by two factors: (1) by granting to the SEC permission to approve the fixing of commission rates after the Court's decision in United States v. Trenton Potteries Co., 273 U.S. 392, 71 L. Ed. 700, 47 S. Ct. 377 (1927) (which had held this kind of rate fixing to be a per se violation of the Sherman Act), the Congress had made a deliberate choice to give the agency the authority to supervise self-regulation with respect to commission rate fixing (422 U.S. at 681, 685), and (2) the Commission had "taken an active role in review of proposed rate changes during the last 15 years" (422 U.S. at 685). Thus it concluded (422 U.S. at 681),
The statutory provision authorizing regulation, § 19(b)(9), the long regulatory practice, and the continued congressional approval illustrated by the new legislation, point to one, and only one, conclusion. The Securities Exchange Act was intended by Congress to leave the supervision of the fixing of reasonable rates of commission to the SEC. Interposition of the antitrust laws, which would bar fixed commission rates as per se violations of the Sherman Act, in the face of positive SEC action, would preclude and prevent the operation of the Exchange Act as intended by Congress and as effectuated through SEC regulatory activity. Implied repeal of the antitrust laws is, in fact, necessary to make the Exchange Act work as it was intended; failure to imply repeal would render nugatory the legislative provision for regulatory agency supervision of exchange comission rates.
Thus, the inquiry in this case must focus upon (1) whether the activities which are the subject of this complaint were required or approved by the Federal Communications Commission, pursuant to explicit statutory authority, in a way that is incompatible with antitrust enforcement, and (2) whether these activities are being so "pervasively" regulated that an immunity from antitrust action must be assumed. In my judgment, these questions must be answered in the negative.
We do not start with a clean slate, neatly balancing whether there should or should not be antitrust jurisdiction. The complaint alleges serious violations of the Sherman Act, and if the government is able to prove these allegations, it follows that a substantial violation of that fundamental charter of American economic life has occurred. The burden is on defendants to demonstrate that they or their practices were intended to be exempt or immune from the broad mandate of the Act. To carry that burden, defendants rely on the Supreme Court decisions discussed above which found certain companies to be immune from the antitrust laws based upon a degree of regulation by government agencies which, as a practical matter, left them no choice but to follow the regulatory schemes and orders. But such regulation is not present in this case.
At the outset, it must be noted that two of the defendants in the instant action, Western Electric and Bell Labs, are not subject to direct regulation by the Federal Communications Commission at all. Defendants' assertion that "each of the general charges of alleged conduct . . . relates to matters which are within the jurisdiction of the regulatory agencies" (Status Memorandum, p. 5), is contradicted by the more precise and more accurate statement of the Federal Communications Commission (Memorandum as amicus curiae, filed December 30, 1975, pp. 21-25) that it "has no direct regulatory responsibility for . . . Western Electric and Bell Laboratories," although it may indirectly affect them through its determinations of the reasonableness of expense and rate base items claimed by AT&T. See Smith v. Illinois Bell Telephone Co., 282 U.S. 133, 75 L. Ed. 255, 51 S. Ct. 65 (1930). Legislative history over the years shows that congressional concern over AT&T's intra-corporate structure never matured beyond directing the Federal Communications Commission to conduct a study. Once that study was completed (Federal Communications Commission, Report on the Investigation of the Telephone Industry in the United States, H.R. Doc. No. 340, 76th Cong., 1st Sess. (1939)), Congress took no further action, nor was the Commission given authority to take further action.
Consequently, it has been the Federal Communications Commission's consistent position that it has no authority to alter, regulate, or otherwise to interfere with AT&T's internal structure, including its relationships with Western Electric and Bell Labs. See Federal Communications Commission, Report on the Investigation of the Telephone Industry in the United States, supra, at 487-589; Consent Decree Program of the Department of Justice, Hearings before the Antitrust Subcommittee of the House Committee on the Judiciary, 85th Cong., 2d Sess. Part II-Vol. II (1958);
Consent Decree Program of the Department of Justice, Hearings before the Antitrust Subcommittee of the House Committee of the Judiciary, 85th Cong., 2d Sess. Part II-Vol. III (1958);
Antitrust Problems of the Space Satellite Communications System, Hearings before the Subcommittee on Antitrust and Monopoly of the Senate Committee on the Judiciary, 87th Cong., 2d Sess. 281 (1962);
AT&T Charges for Interstate Telephone Service (Phase II) 64 F.C.C.2d 1 (1977), pp. 15, 18, 20, 27; and see International Tel. & Tel. Co. v. General Telephone & Electronics Corp., 518 F.2d 913 (9th Cir. 1975). Beyond broad general statements, defendants have cited nothing to the contrary. In view of this history, it is difficult to see on what basis Western Electric, Bell Labs, or the relationships involving them, could be considered immune from the antitrust laws on any theory.
AT&T's Long Lines Department and the Bell Operating Companies are in a somewhat different posture, for they are subject to FCC regulation in a variety of ways, and the Commission has to a substantial extent exercised this authority. See, e.g., Specialized Common Carrier Services, 29 F.C.C.2d 870, 31 FCC.2d 1106 (1971), aff'd. sub nom., Washington Utilities and Transportation Commission v. Federal Communications Commission, 513 F.2d 1142 (9th Cir. 1975), cert. denied sub nom., National Association of Regulatory Utility Commissioners v. Federal Communications Commission, 423 U.S. 836, 46 L. Ed. 2d 54, 96 S. Ct. 62 (1975); MCI Communications Corp. v. Am. Tel. & Tel. Co., 496 F.2d 214 (3rd Cir. 1974). But there is nothing in either the Communications Act or the related statutes to suggest that, with respect to the activities and relationships
which are significant to this case, Congress intended to vest in the Federal Communications Commission such pervasive regulatory authority as to override antitrust considerations, nor is there anything to indicate that the antitrust laws are incompatible with the operation of these regulatory statutes as intended by the Congress.
More importantly, the regulatory charter of the Commission itself, while broad in many respects, is at the same time relatively weak. For example, telephone tariffs--a primary regulatory tool--become effective upon filing by the carrier after 90 days notice without the necessity for Commission scrutiny or approval (47 U.S.C. f 203(b) (1)); a carrier may file a new or revised tariff at any time (47 U.S.C. § 204); and the power of the Commission to suspend a tariff is limited to a five-month maximum (47 U.S.C. S 204). The weakness of the regulatory scheme is reinforced by a volume of tariff filings beyond the capacity of the Commission to handle. During the 12-month period from September 1974 through August 1975, the Commission received 1,371 tariff filings totaling 11,491 pages, and because of this volume, it was able to investigate only a small percentage of the tariffs. Thus, it is not surprising that the Commission has concluded that "rate filings generally proceed from the carrier's independent judgment. . . ." Memorandum of FCC, filed December 30, 1975, pp. 19-20.
The statutory weaknesses, the general inability of the Commission to scrutinize all the tariffs submitted to it, and perhaps other factors (e.g., the lack of adequate resources effectively to regulate AT&T, a corporate giant),
have produced the result of a far less than pervasive or specific regulation of the areas that are critical to this case. In any event, whatever the reasons, it is clear that regulation of defendants' conduct has not been such that this antitrust action would disturb or interfere with it.
The FCC--unlike, for example, the SEC in the stock exchange cases--has consistently taken the position that antitrust enforcement through court action is not precluded in this area.
In the Matter of Amendment of Subpart F of Part 1 of the Commission's Rules, 42 F.C.C. 905, 906, 910-912 (1959); In the Matter of the Applications of the Connecticut Water Co. & Woolridge Bros., Inc., 25 F.C.C. 1367, 1378 (1958). In its memorandum filed with the Court in this case on December 30, 1975, the Commission noted (p. 27):
Among the considerations it cited in support of its position, the Commission stressed, inter alia, that, while under section 214 of the Communications Act, 47 U.S.C. § 214, it has exclusive market entry authority, antitrust actions not only do not necessarily conflict with that authority, but might even complement it in appropriate circumstances; the courts and the Commission have concurrent responsibilities, but when there is a conflict, the doctrine of primary jurisdiction
is adequate to resolve the matter; the Commission has never considered its authority over equipment interconnection to displace the antitrust laws; and even with respect to tariffs, since, as noted supra, they often become effective without Commission scrutiny or approval, the courts appropriately exercise antitrust jurisdiction.
According to the complaint,
defendants have chosen to engage in a variety of predatory activities designed to shut out potential competitors from the telecommunications markets, including the denial to competing entities of interconnection privileges with AT&T's monopoly facilities; unlawful rate adjustments in response to competition; refusal to permit telephone customers to provide their own terminal equipment and to interconnect it to AT&T's network; and perpetuation of various production and marketing practices designed to curb competition. There is absolutely nothing to suggest that Congress expected the Commission to require or approve, or that the Commission did require or approve any of these practices. These activities not only violate the antitrust laws but they are also inconsistent with the purpose of the regulation, or at the very least they are not required or encouraged either by regulatory theory or by regulatory action.
In such a posture, the abstract philosophical differences between regulation and competition will hardly serve to oust the antitrust laws from their normal function and effect. The purpose of the implied immunity rule is to eliminate adherence to antitrust standards when there are irreconcilable differences between the antitrust laws and federal regulatory statutes.
But the antitrust laws cannot be held hostage to a supposed irreconcilability between antitrust and regulatory enforcement when no such irreconcilability exists in fact, nor can the alleged unlawful actions of defendants be deemed protected from the Sherman Act by the cloak of generalized regulation of AT&T by the Commission.
In short, it would be a gross misconception of the realities to equate the instant statutory scheme, the relatively weak regulatory controls which have implemented that scheme, and defendants' alleged activities which offend both the antitrust laws and the regulatory purposes, with the kind of explicit regulation endorsing industry conduct which the Supreme Court has held in relatively few instances to be inconsistent with antitrust enforcement.
There is another, alternative basis for reaching the same conclusion. This complaint alleges a broad conspiracy to monopolize various aspects of the telecommunications industry through a symbiotic relationship among AT&T, Western Electric, Bell Labs, and the Bell Operating Companies (see p. 2, supra). Even if it be assumed, arguendo, that the Commission exercised explicit regulatory authority over only some segments of the activities challenged in the complaint, it does not follow that defendants are immune from antitrust liability even with respect to them. Defendants' purpose is alleged to be the monopolization of the telecommunications service and equipment market, and the bulk of their conduct, including that revolving around Western Electric and Bell Labs, cannot under any reasonable view be regarded as immune from antitrust enforcement by virtue of regulation. In that circumstance, the remainder of the challenged conduct is likewise subject to antitrust consideration, both because it constitutes a means for achieving an unlawful end ( California Motor Transport v. Trucking Unlimited, 404 U.S. 508, 515, 30 L. Ed. 2d 642, 92 S. Ct. 609 (1972)), and because it represents one facet of a larger monopolistic scheme. See Carnation Co. v. Pacific Westbound Conference, 383 U.S. 213, 222, 15 L. Ed. 2d 709, 86 S. Ct. 781 (1966); Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 8 L. Ed. 2d 777, 82 S. Ct. 1404 (1962); Ricci v. Chicago Mercantile Exchange, 409 U.S. 289, 316, 34 L. Ed. 2d 525, 93 S. Ct. 573 (1973) (Marshall, J., dissenting).
According to the government (Brief in Am. Tel. & Tel. Co. v. United States, No. 77-1109 (D.C. Dir.), pp. 5-6), defendants dominate three markets--long distance transmission, equipment manufacturing, and local franchise monopolies--and they use the leverage from their control of each to defend and support their monopoly position in the other two. It is precisely in this kind of situation, that the doctrine of primary jurisdiction is most useful,
and this Court is fully prepared to refer appropriate issues to the FCC under that doctrine (see note 45, infra). But it would subvert the purposes of the antitrust laws totally to sever from the case and to refer to the Commission some of the issues on the theory that it has exclusive jurisdiction when the consequence of such a referral would be that a significant portion of what is alleged to be one comprehensive, integrated, and mutually supporting conspiracy could never be considered by the courts. See Georgia v. Pennsylvania Railroad Co., 324 U.S. 439, 89 L. Ed. 1051, 65 S. Ct. 716 (1945). This would then leave the courts with a truncated antitrust action--a result that would stand the principle of careful non-interference between legitimate regulatory and antitrust enforcement on its head.
While it is not necessary here to rely directly upon these "comprehensive monopoly" principles in adjudicating the jurisdictional issue, they provide additional and alternative support for the conclusion that antitrust jurisdiction has not been ousted by the regulatory scheme.
For these reasons, the Court rejects defendants' contention that the Court lacks antitrust jurisdiction over the matters alleged in the complaint. However, in the event that it should subsequently appear after the issues have been crystallized--e.g., after discovery has been completed--that with respect to some of defendants' conduct the Commission has special expertise or there may be a conflict between antitrust enforcement and regulation, the issues relating to such conduct will be referred to the Commission under the doctrine of primary jurisdiction.
But there is no basis for defendants' continued insistence that the jurisdictional issue
is not settled
or that, until it is settled in their favor, it is not possible to proceed with this case in a way that is fair to both parties. The issue was decided against defendants by Judge Waddy, and his decision was not disturbed either by the U.S. Court of Appeals or the U.S. Supreme Court. Upon careful reconsideration, this Court again reaches the conclusion that it has jurisdiction of this action and that no part of this case is within the exclusive jurisdiction of the Federal Communications Commission.
Defendants have submitted a proposed order providing that "the plaintiff in this case is the government of the United States of America including all of the departments, agencies, bureaus, and other subdivisions thereof from which defendants have sought recovery." The effect of this order, if adopted by the Court, would be to subject all agencies and departments of the government to discovery under Rule 34 of the Federal Rules of Civil Procedure. The Department of Justice argues that only it is a party, and that discovery from other government agencies and departments must proceed under the more restrictive provisions of Rule 45, F.R.Civ.P. The question that is raised by these opposing positions is "who is the plaintiff?"
It should be noted at the outset that some discovery has been and is being secured to a limited extent from government agencies other than the Department of Justice. On April 27, 1978, Magistrate Margolis, with the consent of the parties, entered Discovery Order No. 2, paragraph 4 of which requires some forty government agencies to respond to the following questions: (i) whether they will produce the documents designated in their entirety for inspection and copying; (ii) whether they object in whole or in part to defendants' designation and the reasons therefor; (iii) whether they will submit disputes over production of documents to the Magistrate for resolution without formal service of a subpoena; and (iv) whether they will submit claims of privilege to the Special Master or the Court for resolution. Generally, the agencies responded by stating that (i) they would not produce the documents in their entirety; (ii) they had objections to various aspects of the discovery sought; (iii) they would submit disputes over production to the Magistrate without formal service of a subpoena; and (iv) they would submit claims of privilege to the Special Master or the Court.
First. The Department of Justice suggests that the voluntary system is working and will continue to work well. Yet it is apparent that problems already exist in the operation of that system, and these are likely to become magnified in the future. One difficulty is that the present procedure is cumbersome in view of the numerous agencies involved, the sheer size of the discovery requests addressed to them, and the fact that defendants ...