Response Of The United States Opposing Defendant's Motion For Trial Subpoenas Under Federal Rule 17(c) : U.S. V. Hayter Oil Company, Inc. Of Greeneville, Et Al.

Page 1

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TENNESSEE AT GREENEVILLE UNITED STATES OF AMERICA ) ) v. ) ) Crim. No. CR-2-93-46 HAYTER OIL COMPANY, INC. OF GREENEVILLE,) TENNESSEE d/b/a MARSH PETROLEUM ) COMPANY AND SONNY WAYNE MARSH, ) ) Defendants. ) RESPONSE OF THE UNITED STATES OPPOSING DEFENDANT'S MOTION FOR TRIAL SUBPOENAS UNDER FEDERAL RULE 17(c) Defendant Sonny Wayne Marsh moves for an Order authorizing the issuance of subpoenas duces tecum for the pretrial production of city and county business tax records, pursuant to Federal Rule of Criminal Procedure 17(c). The subpoenas are directed to the County Clerk of Greene County, Tennessee and the City Recorder for Greeneville, Tennessee. Defendant Marsh's motion attempts to subvert the rule that subpoenas are not pretrial discovery devices in criminal cases. Moreover, defendant Marsh's motion should also be denied because it is untimely, and because the information he seeks is neither evidentiary nor relevant and, therefore, it is not necessary for trial preparation. ARGUMENT Defendant Marsh's Untimely Motion Should Be Denied Because He Se eks To Use Subpeonas As An Improper Discovery Device Defendant's motion should be denied because it is inexcusably

Page 2

untimely and, as such, appears to serve primarily as a prelude for a motion for a continuance that defendants would surely file upon gaining access to the subpoenaed business tax records. The motion should also be denied because defendant Marsh cannot satisfy the Supreme Court's four-prong test that he must pass to demonstrate the propriety of his proposed subpoenas. A. Defendant's Motion Should Be Denied Because It Is An Inexcusably Untimely Delay Tactic Defendant's motion for an Order authorizing his proposed subpoenas should be denied because its untimeliness cannot be excused. Defendant filed his motion on November 2, 1993, a month after the motion cutoff date and eight days before jury selection begins in his trial. The business tax records he seeks have existed for years, and defendant could have sought their production at least from the time he was indicted in July. Defendant Marsh has not even attempted to explain the untimeliness of his motion, the timing of which makes it appear to be nothing but an attempt to lay the groundwork for a motion a continuance. Defendant Marsh's reference to "Defendant Appalachian Oil Company" on page 4 of the Memorandum in Support prompts a comparision that further illustrates the superficial nature of defendant Marsh's motion. As defendant Marsh would no doubt argue before the Court, the United States did not oppose the request for the production of similar business records from Washington County and Johnson City in the case of Page 3

Company, et al., Crim. No. 2-91-78 (E.D. Tenn. 1992). Appalachian Oil, however, filed its request for subpoenas on May 15, 1992 -- a date well within the period for filing motions and over five months prior to trial. Defendant Marsh cannot use on the government's position in Appalachian Oil to support his motion or explain its untimeliness. Defendant Marsh's last-minute motion seeks to subpoena information that he characterizes as "extremely voluminous," yet which is neither evidentiary nor relevant to the issue of whether he participated as charged in a price-fixing conspiracy. Surely if the records were necessary for the preparation of a defense, defendant Marsh would have sought them before now, or he would have explained the reasons for his delay in his untimely motion. In the conspicuous absence of those efforts or explanations, it appears that defendant Marsh has pulled this motion from the Appalachian Oil record (see reference to "Defendant Appalachian Oil at Memorandum in Support at 4) to clear a path for an even more untimely motion for a continuance. These delay tactics should not be tolerated and, therefore, defendant's motion should be denied. B. Defendant's Motion Should Be Denied Because It Does Not Satisfy The Four-Prong Test Of United States v. Nixon Defendant's untimely motion should also be denied

Page 4

because it seeks to use subpoenas to gain improper discovery. As the party seeking pretrial production under Rule 17(c), defendant Marsh has the burden in his motion of establishing that (1) the information he seeks is evidentiary and relevant, (2) that it is not otherwise procurable in advance of trial, (3) his cannot prepare for trial without the information, and (4) that his subpoenas would be issued in good faith and are not intended as a general fishing expedition. United States v. Nixon, 418 U.S. 683, 698, 94 S. Ct. 3090, 41 L. Ed. 2d 1039 (1974); United States v. Lieberman, 608 F.2d 899, 904 (2d Cir. 1979), cert. denied, 444 U.S. 1019 (1980). Subpoenas should be quashed where they are used improperly as discovery tools. Nixon, 418 U.S. at 698; United States v. Brooks, 966 F.2d 1500, 1505 (D.C. Cir. 1992); United States v. Fields, 663 F.2d 880, 881 (9th Cir. 1981). Defendants cannot use subpoenas to gain impeachment material. United States v. Hughes, 895 F.2d 1135, 1145-46 (6th Cir. 1990). Defendant Marsh's motion should be denied because it does not clear all four hurdles set forth in Nixon; rather, it fails three, beginning with the requirement that the information sought be evidentiary and material. 1. Defendant seeks the business tax reports to establish the number of gallons of gasoline each distributor sold in

Page 5

Greeneville and Greene County during the indictment period. But defendant Marsh's percentage share of the Greeneville market is irrelevant to his guilt in this case. Thus, the information defendant Marsh seeks is neither evidentiary nor relevant. Defendant Marsh is charged with agreeing with at least some of his competitors to fix, raise and maintain retail gasoline prices within the Greeneville area between 1984 and the end of 1988. As such, defendant Marsh is charged with participating in a horizontal price-fixing agreement, which is a per se violation of the Sherman Antitrust Act. Arizona v. Maricopa County Medical Society, 457 U.S. 332, 348-51, 102 S. Ct. 2466, 73 L. Ed. 2d 48 (1982); United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 218, 60 S. Ct. 811, 84 L. Ed. 1129 (1940). A horizontal price-fixing agreement cannot be excused or justified because the prices set were allegedly reasonable, or because the conspirators were motivated by good intentions or business necessity, or because they did not eliminate all forms of competition between themselves. National Collegiate Athletic Ass'n v. Board of Regents, 468 U.S. 85, 102, 104 S. Ct. 2948, 82 L. Ed. 2d 70 (1984); Maricopa County Medical Society, 457 U.S. at 348-51. Simply put, any number of gasoline distributors could agree to fix prices regardless of the size of their slice of the pie. The crime is making the agreement, not increasing

Page 6

one's market share. Information regarding defendant Marsh's percentage share of the Greeneville area gasoline market has no bearing on the question of whether he agreed with other competitors to fix, raise and maintain retail gasoline prices as charged. Thus, the business tax records he seeks are neither evidentiary nor relevant and, therefore, defendant Marsh's motion should be denied because it fails to satisfy the first Nixon test. 2. Defendant Marsh's motion should also be denied because it fails to establish that defendant Marsh cannot prepare for trial without the business tax records he seeks. This information cannot possibly refute the charge that he agreed to fix, raise and maintain retail gasoline prices with his co-conspirators. That defendant Marsh waited until the eve of trial to subpoena this information speaks for its materiality to any legitimate defense he might attempt to raise at trial. Similarly, defendant makes no effort to explain how the information he seeks could "tend to show the competitive nature of the Greeneville and Greene County gasoline markets . . . ." Memorandum in Support at 3. It is undisputed in this case that several different gasoline distributors sold varying amounts of gasoline within the Greeneville area during the indictment period. At best, the business tax information defendant seeks could only be used to distract

Page 7

the jury with piles of irrelevant numbers concerning gallons sold, taxes paid and market share. Defendant has failed to establish that he cannot prepare for trial without the material he seeks to subpoena and, therefore, his motion should be denied because it fails to clear the third Nixon hurdle. 3. Finally, defendant's motion should also be denied because it seeks to use Rule 17(c) subpoenas as improper discovery and delay devices. Defendant seeks information that will have no bearing on the resolution of the question of whether he is guilty or not guilty of participating in an illegal horizontal price-fixing agreement. Because this information is neither evidentiary nor relevant to his case, he cannot begin to make a claim that he is entitled to discover what Tennessee law recognizes is sensitive and confidential business information. Under these fact, it appears that at best, defendant Marsh's proposed subpoenas comprise part of a thinly veiled attempt to delay the trial. In submitting these subpoenas to the Court a month after the motion cutoff date and a week before jury selection, defendant Marsh claims that he cannot possibly defend this case without this additional mountain of information. But as he indicates in his motion, the documents he seeks will be "extremely voluminous" -- no doubt too voluminous for him to assemble, digest and "review and summarize in detail" in

Page 8

time for trial. Memorandum in Support at 4. It is obvious that if the Court grants this motion, defendant will surely demand an continuance in order to "review and summarize in detail" the voluminous material purportedly "necessary for preparation" of a defense -- though irrelevant to any essential element of the charged offense. Thus, defendant's motion should be denied because it also fails to clear the fourth Nixon hurdle. CONCLUSION Defendant Marsh has had notice of this investigation for a substantial period of time, beginning at least when the grand jury first subpoenaed his records in August 1989. The United States notified him of his status as a target of the grand jury's investigation on June 1, 1993 (attachment 1), and he was indicted on July 21, 1993. He has known for years of the existence of the business tax records he seeks to subpoena, and he has chosen to ignore them until the eve of trial. Surely if they were "necessary" for the preparation of a defense in this case, he would not have waited until now to attempt to begin to acquire them. For the convenience of the Court, the United States hereby incorporates into this response the relevant arguments from its motion to quash subpoenas filed on October 21, 1993. For the foregoing reasons, the United States respectfully requests that the Court deny defendant

Page 9

Marsh's motion for Rule 17(c) subpoenas. DATED: November , 1993 Respectfully submitted, William D. Dillon William G. Traynor Attorneys Antitrust Division U.S. Department of Justice Suite 1176 75 Spring St., S.W. Atlanta, GA 30303 404/331-7100 CERTIFICATE OF SERVICE This is to certify that on November 3, 1993 the Response Of The United States Opposing Defendant Marsh's Motion For Trial Subpoenas Under Federal Rule 17(c) was served on the counsel listed below by sending photocopies of these pleadings via United States mail to the following addresses: John T. Milburn Rogers, Esquire Counsel for Sonny Wayne Marsh 100 South Main Street Greeneville, TN 37743 (615) 639-5183 Frank Johnstone, Esquire Counsel for Hayter Oil Company, Inc. Wilson, Worley, Gamble, & Ward P.C. 110 East Center Street P.O. Box 1007 Kingsport, TN 37662-1007

Page 10

(615) 246-8181 Roger W. Dickson, Esquire Counsel for Hayter Oil Company, Inc. Miller & Martin Volunteer Building, Suite 1000 832 Georgia Avenue Chattanooga, TN 37402 (615) 756-6600 William G. Traynor Attorney Antitrust Division U.S. Department of Justice 75 Spring Street, S.W., Suite 1176 Atlanta, Georgia 30303 (404) 331-7100 TNGAS 1008 Please refer to: 60-5541-0030 November 3, 1993 VIA FEDERAL EXPRESS R. Murry Hawkins, Clerk Eastern District of Tennessee Office of the Clerk Federal Building, Room 212 101 Summers Street, West Greeneville, TN 27743 Attention: Ms. Connie Lamb Re: United States v. Hayter Oil Company, Inc. of Greeneville, Tennessee d/b/a Marsh Petroleum

Page 11

Oil Company and Sonny Wayne Marsh, CR-2-93-46 Dear Ms. Lamb: Please find enclosed an original and two photocopies of the United States' Response Opposing Defendant Marsh's Motion For Trial Subpoenas Under Federal Rule 17(c). I would appreciate it very much if you would transmit one photocopy to Judge Tilson, and return a file-stamped copy to me in the enclosed self-addressed envelope. Thank you very much for your help in this matter. Sincerely, William G. Traynor Attorney Enclosures cc: Roger W. Dickson, Esquire Frank Johnstone, Esquire John T. Milburn Rogers, Esquire

Updated August 18, 2015