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The People v. Dorr





APPEAL from the Circuit Court of Cook County; the Hon. JOSEPH A. POWER, Judge, presiding.


Rehearing denied January 27, 1971.

This is an appeal from an order of the circuit court of Cook County adjudging Edward Dorr (herein referred to as respondent) in contempt of court for wilfully failing to comply with a court order requiring the production of certain documents theretofore requested from him under a subpoena duces tecum. The presence of constitutional questions brings the cause directly to this court. (See our Rule 603.) 43 Ill.2d R. 603.

The record before us discloses that a special February, 1970, Cook County grand jury, impaneled for the purpose of investigating possible violations of the Illinois Antitrust Act (Ill. Rev. Stat. 1969, ch. 38, par. 60-1 et seq.) within the coal industry in this State, caused the issuance and service upon respondent of a subpoena duces tecum calling for the production of documents, books, and records, of the Roth-Adam Fuel Company, of which respondent is president.

In response to the subpoena, the salient points of which appear as an appendix hereto, respondent delivered to the grand jury the following documents relating to Roth-Adam: Copies of the certificate of incorporation, by-laws, and corporate minutes commencing with the minutes of the annual meeting of stockholders on June 30, 1965, as part of the "Corporate Records"; the 1969 annual statement, containing the names and addresses of the officers and board of directors; W-4 forms, which contain the names, addresses, and positions of employees; the "Check and Voucher Register", reflecting all disbursements made by Roth-Adam, except for payroll, but including payment of commissions; the "Profit and Loss" statements and "Balance Sheets" for the fiscal years ending June 30, 1965, 1966, 1967, 1968, 1969; copies of price lists commencing with that of December 1, 1966; a file containing all documents relating to bids submitted by Roth-Adam; a file containing all documents relating to conventions, meetings, etc.; two files containing all correspondence between Roth and the Chicago Coal Merchants Association, its members and associate members, etc.; two files containing all correspondence between Roth-Adam and any Federal, State, local, or other public bodies and regulatory agencies; a file containing all documents relating to complaints received by Roth-Adam; a "Blue Book of Telephone Numbers"; and a file containing copies of work sheets showing salesmen's expenses for the fiscal years ending June 30, 1965, 1966, 1967, 1968, and 1969.

Some time later the Attorney General, on behalf of the special grand jury, communicated a further demand to respondent through his counsel, specifically designating by category the types of documents further desired. In this regard, respondent raises no contention that this later demand requested materials not originally called for in the subpoena. After conferences between representatives of the Attorney General and counsel for respondent, the latter agreed to produce all "back-up" documents relating to salesmen's expenses; miscellaneous selling expenses, and miscellaneous, general and administrative expenses, notes receivable, and miscellaneous investments. Respondent, however, refused to produce the following materials: All payroll checks issued during the period covered by the subpoena; copies of the quarterly employer tax returns of Roth-Adam, commonly referred to as IRS forms 941; and all documents related to the following bookkeeping accounts: salesmen's salaries, advertising, miscellaneous commissions, office salaries, officers' salaries, legal, auditing, and collection fees, contributions, loans receivable, sundry receivables, investment of seasonable funds, prepaid salaries and wages, and accrued salaries and wages. There is, again, no question raised that the foregoing documents and records were not covered by the terms of the subpoena itself.

On the ground that the demand for the documents and records which respondent has refused to produce was invalid as a "constructive" unreasonable search and seizure (see People v. Lurie, 39 Ill.2d 331; People v. Allen, 410 Ill. 508, 513), respondent petitioned the circuit court for an order quashing the subpoena. The Attorney General filed an answer to the petition, and after a hearing, the petition was denied and respondent was ordered to produce the documents in question.

Thereafter, the Attorney General filed a motion for a ruling directing respondent to show cause why he should not be held in contempt of court for refusing to produce the requested materials. The ruling issued, and respondent, in answer thereto, raised the same constitutional objections theretofore set forth in his petition seeking to quash the subpoena. At the hearing on the rule to show cause, respondent admitted his refusal to produce the documents in question and was thereupon adjudged in contempt of court and committed to the county jail. Bail was set at $5000, and the requisite $500 cash deposit was made.

It is argued by respondent that insofar as the subpoena called for the materials which he refused to produce, it constitutes an attempted unreasonable search and seizure prohibited by the fourth and fourteenth amendments to the Federal constitution and section 6 of article II of the Illinois constitution. Specifically, respondent contends that there was no showing that the documents and records sought are material or relevant to the grand jury's investigation. In that regard, the Illinois Antitrust Act makes it illegal for any person or corporation to:

"(1) Make any contract with, or engage in any combination or conspiracy with, any other person who is, or but for a prior agreement would be, a competitor of such person:

a. for the purpose or with the effect of fixing, controlling, or maintaining the price or rate charged for any commodity sold or bought by the parties thereto * * *;

b. fixing, controlling, maintaining, limiting, or discontinuing the * * * mining, sale or supply of any commodity * * * for the purpose or with the effect stated in paragraph a. * * *;

c. allocating or dividing customers, territories, supplies, sales, or markets, functional or geographical, for any commodity or service; * * *." Ill. Rev. Stat. 1969, ch. 38, par. 60-3.

Because of the numerous and varied activities which may constitute substantive violations of the quoted portions of the Act, grand jury investigations seeking to ascertain the probable existence of such violations must be given the broadest scope possible, consistent, of course, with constitutional limitations. Thus in the circumstances here present, what we observed in People v. Allen, 410 Ill. 508, 517, is particularly pertinent: "In litigated cases, materiality can be fixed with a relatively high degree of precision by reference to the issues formulated in the pleadings. No standard of comparable certainty exists with respect to an inquiry by a grand jury. The very purpose of such an inquiry is to uncover matters previously unknown to the investigating agency. It is not necessary that a `cause' or `specific charge' be pending before the grand jury as a condition to its right to command the production of documents. (Hale v. Henkel, 201 U.S. 43; Wilson v. United States, 221 U.S. 361.) Such a requirement, as pointed out in Hale v. Henkel, would sharply curtail the historic function of the grand jury. `[R]elevancy and adequacy or excess in the breadth of the subpoena are matters variable in relation to the nature, purposes and scope of the inquiry.' Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186.

"Unless the effectiveness of the grand jury in the administration of criminal law is to be drastically impaired, the most that can be required as a standard of materiality is as precise a statement of the subject under investigation as the circumstances permit."

In the present case, we believe that the documents which respondent refused to produce are patently relevant to an antitrust investigation, and it was accordingly unnecessary for the Attorney General to introduce evidence satisfying that criterion. Thus, a review of the payroll checks may uncover payments made not to bona fide employees of Roth-Adam but to competitors, either directly or through strawmen, as a part of a price-fixing or market allocation scheme. (That respondent willingly produced the W-4 forms it held in connection with its acknowledged employees clearly cannot preclude the grand jury from obtaining payroll checks, as it is difficult to imagine that the company would have a competitor or strawman fill out a W-4 form prior to the receipt of an illegal payment under the guise of a payroll expenditure.) The quarterly employer tax returns are equally material and relevant to the investigation of possible antitrust violations, as are the records pertaining to the various accounts payable and receivable. Under these circumstances, we cannot perceive that the grand jury's demand for production of the materials respondent refused to produce in any way transcended the legitimate purpose of the investigation.

It should be noted that respondent makes no claim that he is unable to ascertain exactly what documents have been demanded, and there is thus no question posed concerning the specificity of the demand (see e.g., People ex rel. Legislative Commission v. Keefe, 36 Ill.2d 460). The argument set forth in respondent's brief that subpoenas "must specify with reasonable particularity the subjects to which the desired writings relate" is in the context of this case merely an alternate manner of arguing that relevance of the materials sought must be established, and, as we have seen, the records and documents sought here are patently material and relevant to an investigation into possible violations of the Antitrust Act.

The judgment of the circuit court of Cook County finding respondent in contempt of court for wilfully refusing to obey the order to produce the documents in question is affirmed.

Judgment affirmed.


(Subpoena Duces ...

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