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argued that under the Speech or Debate Clause, one may not challenge a Member's decision to vote to print a publication, even when the number of such publications printed is excessive or goes beyond the reasonable requirements of the legislative function. As to the defamatory statements allegedly made by Rep. Fraser during his election campaign, the defendants contended that the statements did not possess the characteristics of official action necessary to form the basis for any claim of constitutional violations. Finally, the defendants took the position that the plaintiffs were asserting the First Amendment rights of Unification Church members whose claims were not before the court. Thus, said the defendants, the plaintiffs lacked standing.
On June 18, 1979, the plaintiffs filed a memorandum in support of their opposition to the motion to dismiss. They characterized their complaint as being based upon violations of specific First Amendment rights, not upon the common law of defamation, and argued that the action was therefore cognizable by the Federal courts. Subsequently, on July 10, 1979, the plaintiffs filed a supplemental memorandum citing, as additional authority in support of their position, the Supreme Court decision in Hutchinson v. Proxmire, 443 U.S. 111 (1979). (See page 122 of Court Proceedings and Actions of Vital Interest to the Congress, March 1, 1981 for a discussion of that case.)
On September 21, 1979, the defendants filed a reply memorandum to the plaintiff's opposition to the defendants' motion to dismiss the first amended complaint. The defendants charged that the suit was vindictive and frivolous and that the plaintiffs' opposition to their motion to dismiss was without merit and was an attempt to cloud the issues with matters that had nothing to do with the plaintiffs' complaint. The plaintiffs, the defendants alleged, for the fourth time attempted to raise issues not previously raised in the lawsuit. The defendants cited Supreme Court decisions in support of their argument that the Speech or Debate Clause was a complete bar to the action.
On October 19, 1979, the plaintiffs filed a memorandum in response to the September 21st memorandum. The plaintiffs maintained that all matters raised by the defendants had previously been addressed. In addition, the plaintiffs argued that the Speech or Debate Clause did not bar the litigation because the conduct of Rep. Fraser and his staff exceeded the proper functioning of the legislative process. They also reasserted that the unauthorized search of the plaintiffs' church was a violation of their Fourth Amendment rights and that distributing and printing denigrating statements about the plaintiffs violated their First Amendment rights.
Although there was no docketed activity in this case for over two years after the plaintiffs' response memorandum was filed in October 1979, the case was not closed, and the defendants' motion to dismiss the first amended complaint remained pending before the district court.
On January 11, 1982, the plaintiffs filed a second supplemental memorandum in opposition to the defendants' motion to dismiss. In this memorandum, the plaintiffs brought to the court's attention the recent Federal court decision in Benford v. American Broadcasting Companies, Inc., 502 F. Supp. 1148 (D. Md. 1980), aff'd, No. 81-1200 (4th Cir. June 17, 1981), cert. denied, 454 U.S. 1060 (1981) as additional support for their position. (See page 203 of this report for a discussion of that case.) According to the plaintiffs, defendant Fraser had "improperly made and distributed derogatory statements about (them) in press conferences, communications with federal agencies, and numerous campaign appearances" [Second Supplemental Memorandum . ., January 11, 1982, at 3), and, as the court found in Benford, neither "the Speech or Debate Clause, [nor the attendant concept of the 'informing function' (of Congress) can properly be used to protect the publication outside the halls of Congress of materials injurious to private parties." [Id. at 2, citing Benford, supra, 502 F. Supp. at 1155)
Status—The case is pending in the U.S. District Court for the District of Columbia, although there has been no docketed activity since the filing of the plaintiffs' second supplemental memorandum on January 11, 1982. As of March 1, 1983, the court had not ruled
defendants' motion to dismiss the complaint. Food Service Dynamics v. Holtzman
Civil Action No. 79C-2074 (E.D.N.Y.) During the summers of 1976 and 1977, Food Service Dynamics, Inc. (“FSD”), a New York corporation, participated in the Summer Food Service Program for Children, a Federally-funded feeding program administered by the U.S. Department of Agriculture ("USDA"). The services provided by FSD consisted of providing meals to, and managing the food service for, sponsors who provided food services under the program. USDA did not allow FSD to participate in the 1978 summer program.
On July 10, 1979, FSD filed a civil action in the Supreme Court of the State of New York, Kings County, against U.S. Representative Elizabeth Holtzman of New York and three officials of USDA responsible for the administration of the program for the summer of 1978. The complaint charged that: (1) the USDA defendants unlawfully revoked FSD's registration as a vendor authorized to participate in the program for the summer of 1978; (2) Rep. Holtzman and the USDA defendants conspired to deprive FSD of its right to so participate; and (3) Rep. Holtzman defamed FSD at a June 26, 1978 press conference. With respect to this last claim, FSD charged that Rep. Holtzman stated that: (1) officials of USDA had approved vendors who previously engaged in questionable bidding practices, including FSD; (2) bidder FSD supplied food for some affiliates of B'nai Torah Institute, several officers of which were convicted of fraud in the summer feeding program; and (3) USDA had failed to take action to remove any of the eight caterers accused previously of rigging bids or serving poor food. The complaint sought $6.5 million in actual damages and $6 million in punitive damages from defendant Holtzman.
On August 8, 1979, Rep. Holtzman and the USDA defendants filed a joint petition and bond for removal to the U.S. District Court for the Eastern District of New York. The petition was subsequently granted.
On September 4, 1979, Rep. Holtzman answered the complaint, denying the material allegations and setting forth certain affirmative defenses. On that same day, Rep. Holtzman served a document request and a notice of deposition on FSD.
In her answer, Rep. Holtzman asserted first that FSD had failed to state any claim upon which relief could be granted. Second, she maintained that the acts alleged in the complaint were committed within the scope of her Congressional office and in furtherance of her duties to investigate and speak out on matters of public interest and to examine and report upon the implementation of legislation. Third, defendant Holtzman claimed her actions were privileged under the Constitution of the United States and Federal common law. Fourth, she argued that the statements made related to matters of public concern, including public health and safety, the administration of a Federally-sponsored program, and the expenditure of Federal funds. Fifth, Rep. Holtzman contended that statements to USDA mentioned in the complaint were statements regarding matters within the jurisdiction of that agency, which was charged with the responsibility of acting in the public interest in its administration of the program. Sixth, Rep. Holtzman asserted that her statements were true in all material respects as of the date of the press conference.
Meanwhile, during the pendency of this civil action, a grand jury on November 27, 1979 handed down an indictment charging several FSD officials with numerous crimes resulting from their prior participation in the summer feeding program, including filing false and fraudulent federal income tax returns. On May 1, 1980, two officers of FSD entered into a plea agreement with the U.S. Attorney for the Eastern District of New York; in the agreement the two officers each pled guilty to a single count of the indictment.
During the past two years, the parties have been involved in frequent disputes regarding discovery, primarily related to requests for production of documents. On October 2, 1980, Rep. Holtzman filed a motion for an order pursuant to Rule 37 of the Federal Rules of Civil Procedurel dismissing the action or, in the alternative, compelling FSD to produce certain documents initially requested by the Congresswoman on September 4, 1979. The documents at issue were the Federal, state, and local income tax returns of indicted FSD principals Robert Duchanov, Barry Goldstein, and Bernard Drang, which, according to Rep. Holtzman, had been ordered produced by the court several months previously (on December 4, 1979) but had never been made available to the defendant. Claiming that FSD's recalcitrance was without justification, Rep. Holtzman argued that the case should be dismissed as a sanction against FSD and as a warning to future litigants.
1 Rule 37 of the Federal Rules of Civil Procedure, entitled “Failure To Make or Cooperate in Discovery: Sanctions", provides, in pertinent part:
(a) Motion for Order Compelling Discovery. A party, upon reasonable notice to other parties and all persons affected thereby, may apply for an order compelling discovery as follows:
(2) Motion. If a party, in response to a request for inspection submitted under Rule 34, fails to respond that inspection will be permitted as requested or fails to permit inspection as requested, the discovering party may move for an order compelling inspection in accordance with the request.
(b) Failure to Comply with Order.
(2) Sanctions by Court in Which Action is Pending. If a party or an officer, director, or managing agent of a party fails to obey an order to provide or permit discovery, including an order made under subdivision (a) of this rule or Rule 35, the court in which that action is pending may make such orders in regard to the failure as are just, and among others the following:
On October 17, 1980, the plaintiff filed a memorandum in opposition to Rep. Holtzman's motion under Rule 37. The plaintiff asserted that the Congresswoman had not asked for the tax records at the time of her original document request and that, in any event, the records were not relevant and therefore not the proper subject of document production in the case. On the same day, Rep. Holtzman filed a reply memorandum arguing that: (1) her initial document request clearly called for the production of the tax returns of the FSD officers and directors; and (2) the income tax returns were patently relevant to Rep. Holtzman's defense to the defamation charge, for impeachment purposes at trial, and to the issue of damages.
On November 18, 1980, U.S. District Court Judge Eugene Nickerson filed a memorandum and order granting Rep. Holtzman's motion to compel the production of the FSD officials' income tax returns and denying her motion to dismiss the complaint. The court found that the tax returns were relevant to the case:
Truth is a defense to defamation. Any fraudulent statements found in the tax returns of officers and directors of plaintiff corporation would be relevant in evaluating the truth of defendant Holtzman's public declarations that plaintiff was unfit to serve as a vendor in a federallyfunded program. Nor can this request be considered a fishing expedition into the private financial affairs of plaintiff's officers. The grand jury indictment charging the three officers with tax fraud provides a sufficient basis to warrant inquiry into their tax returns. [Memorandum and
Order, November 18, 1980, at 4] On June 12, 1981, District Judge Nickerson filed another memorandum and order directing the U.S. Attorney for the Eastern District of New York to make available to the parties the grand jury minutes of the testimony given in the criminal case against the FSD officials by several witnesses concerning the subject matter of the civil suit. The witnesses-Sidney Pinter, Israel Goldberger, Gabor Rosner, and Abraham Tenenbaum-had testified before the
(A) An order that the matters regarding which the order was made or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order;
(B) An order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting him from introducing designated matters in evidence;
(C) An order striking out pleading or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or proceeding or any part thereof, or rendering a judgment by default against the disobedient party;
grand jury under a grant of use immunity but had refused to testify at depositions in the civil case asserting their Fifth Amendment privilege. In response to Rep. Holtzman's request, the court made the testimony of three of the witnesses available. Judge Nickerson explained:
The use immunity provided to Pinter, Goldberger, and Rosner protects them against both direct and indirect use of the compelled grand jury testimony in any criminal prosecution. Kastigar v. United States, 406 U.Š. 441, 453 (1972). It does not, however, protect them from a criminal prosecution based solely on information and evidence derived from legitimate sources wholly independent of the grand jury testimony. Id. at 460.
Therefore, if defendant Holtzman had no access to grand jury testimony and in a deposition asked questions of these witnesses derived entirely from her own independent investigation, the answers to these questions, if given voluntarily, could be used against them in a criminal case. However, if defendant Holtzman were provided with access to the witnesses' grand jury testimony and were permitted only to ask questions derived from that testimony, responsive answers to these questions would be derived from the immunized grand jury testimony and could not be used against the witness in a criminal proceeding. In re: Corrugated Container Antitrust Litigation, M.D.L. No. 310 Appeal of Phillip L. Fleischacker, 80-1090, slip op. at 6852 (2d Cir. March 2, 1981). [Memorandum and Order, June 12,
1981, at 2-3] The court also directed the witnesses to respond to all questions concerning the “specific subjects that actually were touched upon by questions appearing in the transcript of the immunized testimony.” (Id. at 4] They were not compelled to respond to questions other than those concerning the "specific subjects.'
Since one of the witnesses-Mr. Tenenbaum-had not testified before the grand jury and was not granted immunity, he was not directed to answer any questions which might incriminate him.
On June 16, 1981, the plaintiff filed its first request for the production of documents from Rep. Holtzman. Rep. Holtzman filed her response on July 17, 1981, at which time she asserted that she was not required to produce any documents until the plaintiff had fully complied with her previous production request. According to Rep. Holtzman, FSD had concededly" not complied.
Discovery continued in the case through the summer of 1981. On September 23, 1981, U.S. Magistrate John L. Caden, to whom certain discovery-related matters had been referred, issued a protective order, at Rep. Holtzman's request, governing the confidentiality of the documents she had previously provided to FSD. The order stated that: (1) FSD was to make no further copies of the Holtzman documents; (2) one set of copies of the documents provided to FSD was to be given to the three USDA defendants who were also prohibited from further copying; and (3) all documents were to be returned to Rep. Holtzman at the conclusion of the lawsuit.