505 F. Supp. 1125 (D.C. Pa. 1983)
“ ‘Relevant evidence’ means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” Rule 401. “Evidence which is not relevant is not admissible.” Rule 402. Although the standard of relevance is a liberal one, we conclude that it is not met here. We consider the relevance of DSS # s 3 through 5A in turn.
The LTFV finding is irrelevant in this litigation for at least two reasons. First, the finding was a comparison of price constructs and not of actual transactional prices. Second, the finding is countrywide, and does not specify that any particular company sold in the United States at LTFV prices.
The basis for the LTFV finding was a comparison between “purchase price or exporter’s sales price and adjusted home market price,” 35 Fed. Reg. 18549, as defined in the Antidumping Act of 1921, and as calculated with deductions enumerated in the notice. Id. As we have noted, the basis was not a comparison of actual transaction prices in the United States or in Japan.
“Purchase price,” defined in 19 U.S.C. § 162 “was calculated on the basis of f. o. b. or f. o. r. packed prices with deductions for freight, packing and other charges [unspecified] as applicable. The applicable Japanese commodity tax was added to this price.” 35 Fed. Reg. 18549 (emphasis added).
“Exporter’s sales price," defined in 19 U.S.C. § 163 “was calculated by deducting from the resale prices of the related firms to distributors in the United States any applicable discounts to arrive at a net selling price. From the latter, appropriate deductions were made for inland freight in Japan, ocean freight and insurance, U.S. duty, brokerage charges, U.S. freight, warranty costs, packing, and commissions and other selling expenses incurred in the United States. To this additions were made for any applicable Japanese commodity tax refunded or not paid upon exportation of the merchandise.” 35 Fed. Reg. 18549.
“Home market price” was defined in customs regulations as “the price (as defined in section 205, after adjustment as provided for in section 202 of the Antidumping Act, 1921, as amended (19 U.S.C. §§ 164, 161)), at which such or similar merchandise (as defined in section 212(3) of the Antidumping Act, 1921, as amended (19 U.S.C. § 170a(3)) is sold for consumption in the country of exportation on or about the date of purchase or agreement to purchase of the merchandise imported into the United States if purchase price applies, or on or about the date of exportation thereof if exporter’s sales price applies.” 19 C.F.R. § 53.3 (1970). In the Japanese television proceeding, home market price “was based on the delivered price to distributors in the home market. Appropriate deductions were made for discounts and rebates granted for cash, quantities, and certain sales promotions. From the net price, adjustments were made for commissions, warranty and installation costs, inland freight, inland insurance, patent fees, bad debts, where applicable, and packing. Adjustments were also made for differences in the merchandise and differences in advertising and credit costs.” 35 Fed. Reg. 18549.
The Treasury Department’s conclusion that LTFV sales had been made was merely the legal consequence of its finding that “Purchase prices or exporter’s sales prices were lower than home market prices by amounts that were more than minimal in relation to the total volume of sales.” 35 Fed. Reg. 18549. Because of all the adjustments in unspecified dollar amounts which were made to the three types of prices considered in the LTFV proceeding, that finding is of no probative weight to support any conclusion about price differentials, either between actual transactional prices or between “adjusted” prices. Thus the finding has no tendency to make the existence of such price differentials more probable or less probable than their existence would be without the finding. F.R.E. 401.
The finding is plainly irrelevant to show differentials between actual transactional prices, since it is based on a comparison of price constructs. Nor is the LTFV finding probative of differentials between “adjusted” prices. Nothing in the finding or in the record before us suggests that the adjustments made in the LTFV proceeding are the same as those which the finder of fact might consider in this case. While it might be appropriate for the finder of fact to consider adjustments of the type made by Treasury in the LTFV proceeding, the nature and amounts of any such adjustments would have to be proved at trial. Since nothing in the finding indicates the amount of the adjustments, the factual circumstances underlying the determination that the adjustments should be made, or even the actual transactional prices to which adjustments were made, there is no basis in the LTFV finding for a jury to conclude that adjustments should be made on account of, e. g., the Japanese commodity tax. Furthermore, the adjustments which are applicable under the Sherman Act may be very different from those made under the 1921 Antidumping Act, a different statute with a different purpose. Accordingly, the finding is not even relevant to proof of “adjusted” price differentials in this Sherman Act litigation.
Of equal importance is the fact that the LTFV finding is country-wide. It does not constitute a finding that any particular defendant made LTFV sales. Nor, consequently, does it constitute a finding that all of them made LTFV sales. Rather, it is an undifferentiated finding that TV receivers “from Japan” were sold at LTFV prices, and is entirely consistent with any particular defendant’s having made no LTFV sales. This is especially so for the many defendants who were not investigated in the LTFV proceeding, but it is also true of the five defendants who were investigated since they were not named in the finding.
In United States v. Bycer, 593 F.2d 549 (3rd Cir. 1979), the Third Circuit reversed a jury verdict finding a pharmacist guilty of distributing controlled substances. The evidence had shown that the defendant’s records failed to account for large quantities of controlled drugs, and that he and at least six other persons had access to the drugs. The Third Circuit found that the jury verdict was not supported by substantial evidence because, inter alia, others had access to the drugs. The fact that six persons might have distributed the drugs did not provide logical support for the conclusion that one of the six did distribute the drugs. Similarly here, the fact that an industry as a whole was found to have made LTFV sales does not provide logical support for the conclusion that any particular company made LTFV sales. We conclude that the LTFV finding is wholly irrelevant to this litigation, for the reasons stated.
The Tariff Commission finding is also irrelevant for at least two reasons. First, the Commission found that “an industry in the United States is being injured by reason of the importation of television receiving sets, monochrome and color, from Japan sold at less than fair value within the meaning of the Antidumping Act, 1921, as amended.” (Emphasis added). Since for reasons stated above LTFV sales are not relevant to the price differentials which are involved in this case, the finding of injury by reason of LTFV sales is irrelevant on its face.
Second, the Commission defines the injured industry as “facilities in the United States for the production of television receivers,” and notes that the industry includes “approximately 20 firms,” none of which is named in the Commission’s report. Because it is a country-wide determination, the injury finding is not relevant to prove injury to Zenith or NUE. A finding of injury to an industry composed of 20 firms does not render it more probable that NUE or Zenith was injured by reason of LTFV sales. See Bycer, supra.
The dumping finding is not relevant because it is a mere ministerial act which is the automatic consequence of the LTFV and injury findings. Combining the two previous findings and adding the label “dumping” cannot render the injury and LTFV findings more relevant than they are otherwise.
Even if we were to assume that the documents we have discussed have some probative value, we must consider whether that value is outweighted by the factors enumerated in Rule 403: “the danger of unfair prejudice, confusion of the issues, or misleading the jury, or . . . considerations of undue delay, waste of time, or needless presentation of cumulative evidence.” There is already a fairly well developed Rule 403 jurisprudence in this circuit. See United States v. Long, 574 F.2d 761 (3rd Cir.), cert. denied, 439 U.S. 985, 99 S. Ct. 577, 58 L. Ed. 2d 657 (1978); John McShain, Inc. v. Cessna Aircraft Co., 563 F.2d 632 (3rd Cir. 1977); United States v. Flenory, 619 F. 2d 301 (3rd Cir. 1980). The sweep of Rule 403 is best demonstrated by Flenory, where the court held that even an eyewitness identification of a suspect could under certain circumstances be excluded under 403. For the reasons that follow, we find that even if the documents in fact have some probative value, they would have to be excluded by reason of Rule 403.
Assuming arguendo the relevance of the findings, that relevance is at best minimal, yet because the findings bear the imprimatur of the United States government and use language (“less than fair value” and “dumping”) that may unduly influence the jury, they present a substantial danger of unfair prejudice, similar to that presented by the admission of a prior verdict against an antitrust defendant in another case.1
In Coleman Motor Co. v. Chrysler Corp., 525 F.2d 1338 (3rd Cir. 1975), the Third Circuit ordered a new trial specifically because evidence of a prior verdict was admitted. The court commented:
A jury is likely to give a prior verdict against the same defendant more weight than it warrants. The admission of a prior verdict creates the possibility that the jury will defer to the earlier result and thus will, effectively, decide a case on evidence not before it.
525 F.2d at 1351. Since the plaintiffs’ theory of relevance of the 1921 Antidumping Act findings is essentially that it is a prior decision on the same substantive issues, Coleman is squarely apposite.
Admission of the findings would require a “minitrial” as to their trustworthiness, weight and credibility and as to their correctness under the 1921 Act. This would undoubtedly contribute to confusion of the issues. Moreover, since the findings are at best only marginally relevant, and are based on the specific legal standards of the 1921 Act and the specific adjustments made by Treasury, relating the findings to the issues in this litigation is an inherently confusing task. If the findings were admitted, the defendants would, of course, be entitled to point out to the jury, whether by argument or by bringing in testimony, that the 1921 Act findings were made under the particular standards of that Act.
As the defendants have correctly pointed out, if the documents are admitted, defendants would be entitled to raise at trial all the evidentiary matters which support their contention that the documents are not trustworthy. Furthermore, they would be entitled to try to prove that the findings were wrong as a matter of interpretation of the 1921 Act. Finally, they would be entitled to trace the genesis of the findings in order to convince the jury that the documents are, in any event, irrelevant to the legal standards upon which the court would instruct them. These matters would add to the length of the trial, already projected to last a minimum of 12 months, additional time which we conservatively estimate at several months. Any probative value which the documents possess is far outweighed by the undue delay that would ensue from their admission. See John McShain, Inc. v. Cessna Aircraft Co., supra.
Plaintiffs have argued that the documents are relevant to show (1) that defendants’ prices in the United States were lower than prices of comparable models in Japan, and (2) that Zenith and NUE were injured by the price differential. The plaintiffs have developed extensive evidence of alleged price differentials between comparable models in the United States and Japan — the evidence they have prepared on this point fills many volumes of appendices to the FPS. Moreover, the plaintiffs also have ample alternative evidence which, in their contention, shows injury to them. Zenith has submitted detailed damage calculations and has named no less than five Zenith officials who will testify to injury at trial. FPS vol. 19 at 9317. The full list of evidence upon which Zenith relies to prove injury occupies more than 7 pages of the FPS, id. at 9317-24, of which only two lines are devoted to a citation of the Tariff Commission Report in the 1921 Act proceeding. Similarly, NUE has submitted detailed damage calculations and has set forth its injury theory at great length, with only minimal reliance on the Tariff Commission findings. FPS vol. 19 at 9325 to vol. 20 at 9686. The documents from the 1921 Act proceeding are at best needlessly cumulative of this other evidence.
In sum, even if we were to conclude that DSS #s 1 through 6 were trustworthy and minimally relevant, we would nevertheless, because of the clear result of the balancing evaluation under F.R.E. 403, be obliged to exclude them at trial.
The next group of documents with whose admissibility we are concerned consists of records and reports of proceedings under the Trade Expansion Act of 1962, 19 U.S.C. § 1801, et seq., and its successor statute, the Trade Act of 1974, 19 U.S.C. § 2101, et seq.2 The proceedings are of two general types: (1) so-called “Escape Clause” proceedings (§ 301(b)(1) of the 1962 Act and § 201(b) of the 1974 Act),3 in which relief in the form, for example, of import quotas or increased duties is sought by a domestic industry from what are perceived to be the injurious effects of imports of like or competing products; and (2) trade adjustment assistance proceedings (§§ 301(c)(1) and (c)(2) of the 1962 Act and §§ 221 and 251(c) of the 1974 Act) in which an individual firm or group of workers seeks relief in such forms as trade readjustment, job search, and relocation allowances to alleviate the injurious effects of increased imports.4 The documents at issue here include the records of two escape clause proceedings, one under the 1962 Act (DSS # 7) and one under the 1974 Act (DSS # 13). In addition, the plaintiffs offer documents from several trade adjustment assistance proceedings. DSS #s 8, 9, 10, 11, 12, and 24 relate to proceedings under the 1962 Act; and DSS #s 14, 15, 16, 17, and 18 relate to adjustment proceedings under the 1974 Act. The procedures under the 1962 and 1974 Acts are (with some minor differences not germane to the issues before us)5 essentially the same.
In an escape clause proceeding under § 301(b)(1) of the 1962 Act, the task of the Tariff Commission is to determine whether (1) as a result in major part of concessions granted under trade agreements, (2) an article is being imported into the United States in such increased quantities, (3) as to cause or threaten to cause serious injury to the domestic industry producing like or competitive articles.
In an escape clause proceeding under § 201(b) of the 1974 Act, the International Trade Commission is charged with determining whether (1) the articles under investigation are being imported in increased quantities, (2) the domestic industry producing like or competitive articles is being seriously injured or threatened with serious injury, and (3) increased imports are a substantial cause of the injury or threat. Trade concessions are no longer a concern, and increased imports need only be a substantial (rather than the major) cause of injury.
Trade adjustment proceedings under §§ 301(c)(1) [firms] and 301(c)(2) [workers] of the 1962 Act are conducted to determine whether trade concession agreements have led to increased imports with resulting injury to a particular firm or group of workers. In trade adjustment assistance proceedings under § 221 of the 1974 Act [workers] and § 251(c) [firms] the Department of Labor and the Department of Commerce respectively must determine whether (1) a significant number of workers in a firm have become separated or threatened with separation, (2) sales and/or production have declined absolutely, (3) competitive articles are being imported in increased quantities, and (4) increased imports have contributed importantly to the separation and decline in sales and/or production.
The 1962 Act escape clause investigation was instituted on June 8, 1971, upon petition filed with the Commission by three major unions representing workers in the United States television receiver industry. The petitioners alleged that imports of television receivers had seriously injured the domestic industry and that the 1930 rate of duty (35 percent ad valorem) must be restored to remedy the injury. The 1974 Act investigation was initiated in October, 1976, upon petition from eleven unions and five firms representing or employing workers in the television industry.6
As required by statute, in each case the Commission gave public notice of the investigations and of hearings to be held. At the hearings interested parties were given the opportunity to be present, offer evidence, and be heard. Counsel for certain defendants in this case appeared at the § 201(b) proceeding. While witnesses were available for cross-examination, they were permitted to refuse to answer questions that called for the disclosure of what the witnesses regarded as confidential business data. In fact, this privilege was invoked numerous times at both proceedings.7
Following each of the hearings, the commissioners rendered their decisions, which were based not only on evidence adduced at the hearings but also upon the staff reports prepared following the hearings, which in turn relied upon data and information obtained from various sources including the Commission’s own files and those of other governmental agencies. More important from defendants’ point of view is the fact that in both proceedings the Commission and staff elicited (and presumably relied upon) information from domestic producers and importers through field investigation and questionnaires. This information was submitted in confidence and has never been disclosed.
At the conclusion of each of the escape clause proceedings, the staff reports, together with the decisions of the Commission, (and the separate concurring and dissenting views of the various commissioners) were sent to the President, along with copies of the transcripts of the hearings and briefs submitted by interested parties. The decisions and the reports were made public, but with the confidential data deleted.
In the 1962 Act (§ 301) proceeding, the results of which were submitted to the President in November, 1971, the Commission made a negative determination—that is, while the Commission found that imports were increasing, it did not agree that such increase was the result in major part of trade concessions.8 The question of injury to a domestic industry was not reached. In the 1974 Act (§ 201) proceeding which concluded in March, 1977, the Commission found that imports were increasing and that such increased imports were a substantial cause of serious injury or threat of serious injury to the domestic industry producing like or competitive goods.
The plaintiffs also seek to introduce into evidence a large number of documents relating to proceedings brought under §§ 301(c)(1) and (2) of the 1962 Act and § 221 of the 1974 Act. With the exception of DSS # 8, which relates to an investigation instituted on behalf of Emerson (NUE) workers in Jersey City, New Jersey, and DSS # 17 which relates to proceedings on behalf of NUE and Zenith workers, these documents concern workers or firms in the electronics industry other than plaintiffs.
The procedures governing trade adjustment investigations are essentially the same as those governing escape clause proceedings with one important exception—no hearing is held unless requested by an interested party. In none of the proceedings involving either plaintiff here was a hearing held. Like the investigations under the escape clause provisions, these investigations permit ex parte communications and involve receipt of confidential data.
In addition to the records made and decisions rendered in escape clause and trade adjustment proceedings, plaintiffs seek to introduce various computer printouts and lists supplied by the Department of Labor (DSS #s 19 through 23). These documents will be described and discussed infra.
Like the documents offered from the 1921 Act proceedings, the materials described above constitute hearsay. Defendants object to their admission, which is sought under the 803(8)(C) exception, on the grounds that they do not constitute findings within the meaning of the rule and are not trustworthy.
The investigations conducted under § 301(b)(1) of the 1962 Trade Expansion Act and § 201(b) of the 1974 Trade Act produced what we term formal or ultimate findings by the Commission: in the former case that the statutory criteria for relief had not been met—in essence a negative finding (although all commissioners agreed that imports were increasing), see n. 39 supra; and in the latter case a finding that the U.S. industry producing color and monochrome television receivers, assembled or unassembled, finished or unfinished, and subassemblies thereof was being seriously injured or threatened with serious injury and that increased imports were a substantial cause of that injury or threat. These are findings within the meaning of 803(8)(C).
In addition to these “ultimate” findings, plaintiffs seek to introduce as findings various excerpts from the opinions of individual commissioners in each proceeding. In our view, these opinions do not constitute “findings” within the meaning of Rule 803(8)(C) and may not be introduced under that exception, even though the commissioner’s individual remarks quite literally constitute conclusions made by officers of a public agency following an investigation. Each commissioner was provided with the same data; the conclusions they reached individually, however, range from slightly divergent to completely at odds.9
Even in the 201(b) proceeding under the 1974 Act, where the commissioners were unanimous in their finding that increased imports had caused injury to a U.S. industry, they did not agree on the definition of the affected industry (the majority found injury to producers of “color and monochrome receivers, assembled or unassembled, finished or unfinished, and subassemblies thereof”; the concurring members found injury only as to color television receivers, and differed among themselves as to the further definitions (assembled v. unassembled, finished v. unfinished, etc.). To give the individual opinions to the jury and let its members decide which are correct and which are not would be to permit the purest speculation, for the jury members would be considering the opinions in a vacuum. The process would be similar to that required when a jury must decide which of two experts in a personal injury case is the correct one, but here the fact-finder would not have the benefit of information elicited on cross examination.
Were these opinions to be admitted, it would be essential that the staff reports be admitted as well, so that the jury could review the data and conclusions upon which the opinions were based. However, even though the staff reports set forth a multitude of declarative sentences stated as fact and may thus be said to include “findings,” we have already concluded that only the staff findings that are adopted by the public agency are admissible under 803(8)(C). See p. 1145 supra. In addition, the staff reports present problems in terms of trustworthiness.
In determining whether these reports and the findings contained therein are trustworthy within the meaning of Rule 803(8)(C), we have considered in addition to the factors identified by the Advisory Committee as bearing upon the question, certain of the factors we have described supra that seem to us to have relevance to a trustworthiness determination. We note that defendants have not contended that the investigations were untimely, and indeed the statutory mechanism governing an escape clause proceeding requires that a decision be rendered within six months after the petition seeking relief is filed. We note further that a hearing was held in each of the escape clause proceedings at issue here again as required by statute. The agency conducting the investigations (the Tariff Commission and International Trade Commission respectively) has expertise in the areas of imports and foreign trade, and there has been no suggestion that the commissioners or their staffs were not acting impartially in discharging their duties.10
Other factors that we have identified have given us some pause, however, and have led us to conclude that these reports and findings are not trustworthy for purposes of this lawsuit.
Of major importance to this conclusion is the extent to which these findings are based upon or are the product of proceedings pervaded by the receipt of substantial amounts of material that would not be admissible in evidence. (Criterion # 2, supra).
As noted above, in conducting an escape clause investigation, the Commission relies not only upon evidence adduced at the hearings (which themselves permit the admission of hearsay) but also upon confidential data supplied by domestic producers either in response to questionnaires or in interviews. There are three serious problems raised by this procedure. First, the data and information submitted in confidence is not made a part of the public record so that its accuracy and trustworthiness has never been and can never be explored. Second, this data is critical to a determination by the Commission, relating as it does to such matters as domestic production figures and prices, yet, since it is submitted in confidence and is deleted from the public record, there is no way to determine the extent to which it was relied upon by the Commission in rendering its decision or by the staff in preparing its report. Since the record is incomplete (see criterion # 4), the reasonableness of the ultimate findings by the Commission or of the views of individual commissioners cannot be ascertained. Third, while the Commission and its staff do manage to qualify as disinterested investigators, but see p. 1167 infra, many of the suppliers of the confidential information do not, since they were domestic producers for whose benefit the escape clause proceedings were initiated. Because they had a stake in the outcome of the proceedings and knew that the information they supplied was confidential, we feel less inclined to assume the data they supplied was complete and correct than we otherwise might be.
The consideration of such confidential data as is described above implicates the validity of the agency’s expression of expertise as well. (Criterion # 7, supra). To the extent that the Commission was functioning as an expert, the provisions of the rules of evidence governing the receipt of expert opinion are useful in analyzing the trustworthiness question here. Even assuming that the confidential facts and data employed by the Commission were of a type reasonably relied on by experts in the particular field (Rule 703) and, therefore, that they need not themselves be admissible into evidence, Rule 705 provides that the expert may be required to disclose the underlying facts or data on cross examination. Here, not only are the commissioners not available for cross examination, but the trustworthiness of the underlying data can in no other way be explored since the data itself is confidential.
In addition to the fact that the Commission received and considered confidential data, it is clear that other hearsay was the basis of many of the “factual” or declarative statements made in the staff reports and in the opinions of the individual commissioners. The sources of those declarative statements are rarely disclosed. In many instances where they are disclosed, it is clear that the sources are or may be unreliable, e. g., Fairchild News Service, T.V. Digest, Report of U.S. Embassy in Tokyo. Moreover, in the escape clause proceeding conducted under the 1962 Act, the staff and the individual commissioners relied in great part on the dumping proceedings discussed supra. Indeed, it appears that the Commission’s inability to decide that imports were increasing as a result in major part of trade concessions rests largely on the dumping determinations, which we have found to be both untrustworthy and irrelevant to these proceedings. Since we have concluded that the 1921 Act materials cannot be admitted in their own right, the conclusion that they cannot be admitted as part of the record of another proceeding is inescapable. (Criterion # 6, supra).
Finally, we note that the findings made in the escape clause proceedings were made in the context of a protectionist statute, which reflects purposes and policies different from those reflected in the antitrust laws and at least potentially at odds with them, since protectionism shelters U.S. industry from competition, fair or not. Because there appear to be policy as well as investigative and adjudicative considerations involved in these proceedings, see n. 41 supra, it is our view that the findings are at least in part a function of those policy considerations, which underlie the statutes defining the charter of an escape clause investigation, and in this sense the findings may not be trustworthy for purposes of an antitrust proceeding (criterion # 5 supra), though the fact that the issues before the Tariff Commission differed from those before us also bears, and perhaps more directly, on the question of relevance.
In sum, we conclude that the findings made in the escape clause proceedings, even if construed broadly to include statements of fact made by individual commissioners and their staffs, must be excluded as untrustworthy. This conclusion stems largely from the fact that the proceedings are pervaded by the receipt and consideration of confidential data, the validity of which has never been and can never be explored or tested. What is before us is an incomplete record with salient information deleted. In addition, we are troubled by the Commission’s apparent use of other unreliable hearsay and by the extent to which the 1921 Dumping Act findings infiltrate the record of the § 301(b) proceeding. These considerations coupled with the fact that the escape clause investigations were conducted under statutes whose aims and purposes are different from those of the antitrust laws, force us to conclude that the records of the escape clause proceedings are not trustworthy for purposes of this action.
We also have before us the results of trade adjustment assistance proceedings conducted under both the 1962 and the 1974 Acts. The proceedings under the 1962 Act produced records similar to those produced in the escape clause proceedings, consisting of: (1) a determination by the Commission of whether the statutory requirements for relief had been met, i. e., whether as a result in major part of trade concessions, articles were being imported in such increased quantities as to cause or threaten to cause serious unemployment or underemployment to workers in a domestic industry (§ 301(c)(2)) or to a firm (§ 301(c)(1)); (2) the views of the individual commissioners; and (3) the staff reports. The documents submitted in connection with proceedings under the 1974 Act consist only of the determination by the Secretary of Labor that the statutory criteria for eligibility for relief had or had not been met and a summary of the reasons for so concluding. We deal with the proceedings under each of the Acts separately, since they raise somewhat different problems as to whether they contain findings, what the findings consist of, and whether they are trustworthy.
The 1962 Act proceedings at issue here comprise DSS #s 8, 9, 10, 11, 12 and 24 and include both worker and firm investigations. In all but one of the investigations, the Commission could not agree upon a result, the commissioners being equally divided as to whether the statutory criteria had been met, so that the reports issued to the President contained no formal or ultimate findings under §§ 301(c)(1) or (c)(2) and concomitantly no recommendations.11 In Worker Investigation No. TEA-W-144 (DSS # 10), which was instituted by a petition filed on behalf of workers at the RCA Corporation plant at Indianapolis, Indiana, the Commission unanimously found that articles like or directly competitive with unrecorded magnetic tape were not as a result in major part of trade concessions being imported in such increased quantities as to cause or threaten unemployment or underemployment of a significant number of workers. As to other products manufactured at the plant (television yokes, tuners and horizontal output transformers), the Commission was equally divided and made no finding.
Thus, in all but one of these proceedings, there are no formal findings at all. Furthermore, for the reasons set forth above, we conclude that the views of the individual commissioners and the statements of fact in the staff reports cannot be termed 803(8)(C) “findings.”
Worker trade adjustment assistance proceedings brought under the 1974 Act are the subject of DSS #s 14, 15, 16, 17, and 18. With the exception of DSS # 17, which relates specifically to proceedings on behalf of NUE workers in Jersey City and Zenith workers at various locations across the country, each DSS contains the results of several individual worker adjustment investigations in a particular industry, e. g., stereos, televisions, all as summarized in the Federal Register “Notices of Certification Regarding Eligibility to Apply for Worker Adjustment Assistance.” Each summary offered here (except for those in DSS # 17 discussed infra) contains an affirmative finding—that a significant number of workers at a particular firm or subdivision thereof have become totally or partially separated (or are threatened with total or partial separation); that sales or production or both of such firm have decreased absolutely; and that increased imports of like or competitive products contributed importantly to such separation, or threat, and to such decline in sales and/or production. In addition, each summary contains what may be termed subsidiary findings, that is, declarative statements containing statistical data supporting the various ultimate findings of increased imports, declines in production, etc.12 Because the findings are those of a single employee of the Department of Labor, these summaries do not present the conflicting views and conclusions that characterized proceedings conducted by the Tariff Commission.
Unlike the other groups of documents relating to trade adjustment proceedings under the 1974 Act, DSS # 17 contains both certifications and denials of certification of eligibility for worker assistance. These documents relate specifically to workers employed by plaintiffs. The only document offered that relates to NUE workers is a Federal Register notice that a proceeding has been instituted on behalf of workers at Emerson’s Jersey City plant. This notice does not, of course, constitute a finding.
Plaintiffs have also offered Federal Register summaries of nine proceedings on behalf of Zenith workers at various plants throughout the United States. Of these, five resulted in a negative determination, i. e., that the statutory criteria for relief had not been met. In addition to such “ultimate findings,” these summaries include subsidiary findings in the form of discussions of the reasons why a particular requirement is deemed not to have been fulfilled (e. g., sales or production have not declined absolutely). There is a disclaimer of any findings as to the other criteria.
In three Zenith investigations, the petitioning workers were certified as eligible to apply for relief. These proceedings thus contain the ultimate finding that each of the statutory requirements has been fulfilled, as well as subsidiary statistical findings in support of these conclusions. One investigation resulted in a negative determination as to workers in a certain division of two different Zenith plants and a positive determination as to workers in other divisions of these plants.
We conclude that the ultimate and subsidiary findings contained in these summaries of worker adjustment proceedings under the 1974 Act qualify as findings within the meaning of 803(8)(C).
The documents offered from the trade adjustment assistance proceedings present problems of trustworthiness like those we found in analyzing the escape clause proceedings. All of these investigations, whether conducted by the Tariff Commission under the 1962 Act or the Department of Labor under the 1974 Act, are pervaded by confidential and hearsay data elicited from parties with a stake in the outcome. The records submitted from the 1962 Act proceedings contain large gaps where confidential (and critical) material was deleted. The documents submitted from the 1974 Act proceedings are summaries only and contain no citations to sources. Moreover, in none of these proceedings was a hearing required and in the great majority of them no hearing was held. Finally, we note the task before the various agencies in these investigations was defined and limited by the scope of trade acts whose purposes are protectionist, and thus the issues considered diverge sharply from those before us, and have policy overtones.
For all the foregoing reasons, we do not believe that conclusions in the trade adjustment assistance proceedings can be deemed trustworthy for purposes of this case.
Even if deemed trustworthy, the findings made by the Tariff and International Trade Commissions in their respective investigations are not relevant to the issues in this case for the following reasons.13
First, the finding of the Tariff Commission in the 1962 Act proceeding was essentially a negative finding and could be offered to prove no more than that trade concessions did not contribute to an increase in imports which in turn threatened or caused serious injury to a domestic industry, a fact that bears no relationship to any of the issues before us in this antitrust action.
Second, the finding of injury to the domestic industry producing television receivers in the 1974 Act escape clause proceeding was an industry-wide finding that considered imports from all sources and did not specifically or necessarily include a finding of injury to these plaintiffs14 or imports from these defendants. As we have noted, supra at 1157-1158, the fact that an industry as a whole is found to have suffered injury or that export activity world-wide is found to have been a substantial cause of that injury does not provide logical support for the conclusion that any particular domestic firm has been injured or that imports from any particular country or foreign producer have been the cause of that injury. Even more attenuated is plaintiffs’ argument that the industry-wide injury determination can support a finding of a causal connection between the putative anti-competitive acts of these defendants and the injury these plaintiffs are said to have suffered, for not only are these parties not identified in the escape clause findings, but the means by which the increase in imports had been effected was not considered or discussed by the Commission. Thus, the injury could as easily have resulted from fair as from unfair competition.15 The inference that the injury resulted from antitrust violations simply cannot be drawn from these materials.
Similarly, though plaintiffs have argued to the contrary, the escape clause findings are not relevant as proof of intent to affect United States commerce and of actual effect on that commerce for purposes of subject matter jurisdiction,16 or as proof of predatory intent and anticompetitive effects for purposes of the substantive violations alleged here. As we have observed, a finding that imports from all sources have injured a domestic industry does not logically support the inference that imports from these defendants have had that effect or that these defendants intended that effect. We note further that even if we were to assume that some inferences could be drawn about these parties from the documents at issue here, those inferences are not nearly so sweeping as plaintiffs would claim.
Seizing upon the legal maxim that a party is deemed to intend the natural and probable consequences of his acts17 (rescribed in our opinion on subject matter jurisdiction, supra, n. 66), plaintiffs posit that defendants’ anticompetitive intent can be inferred from the finding of injury. This argument ignores that such an inference could be drawn only if plaintiffs also produced proof of anticompetitive acts. Intent cannot be inferred from consequences (effects) alone. The escape clause proceedings do not implicate any conduct other than the act of exporting.18 In fact, as we have noted supra n. 46, in the § 201 proceeding the Commission specifically made no findings regarding the antitrust issues in this litigation.
For all of the above reasons, we have concluded that the escape clause proceedings are not relevant in the litigation before us.
As we earlier observed, the trade adjustment assistance proceedings conducted under the 1962 Act in all cases but one resulted in a split of opinion among the commissioners and, therefore, in no formal findings. Even if we were to glean proper 803(8)(C) findings from these records, however, we would nevertheless be moved to exclude them on grounds of relevancy, since they do not tend to make more or less probable the existence of any fact of consequence to the determination of the action. F.R.E. 401. Like the escape clause proceedings, these investigations considered imports from all sources, not just from Japan or from these defendants. Furthermore, only one of these investigations involved a plaintiff in this lawsuit (DSS # 8—Emerson [NUE] workers). The probative value here of a nonfinding as to nonplaintiffs is nil. The Emerson proceeding is of no probative value since it is one of the split decisions and, again, involved imports from all sources.
Similarly, we have concluded that the trade adjustment assistance investigations under the 1974 Act that relate to workers at plants other than those of plaintiffs must be excluded as irrelevant to this proceeding. In addition to bearing not at all on any injury these plaintiffs might have suffered, they relate to imports from all sources and consider an injury that could have resulted from fair competition. Thus they do not advance the proof of injury to competition required by the antitrust laws or of injury to these plaintiffs, required in a private treble damage action. Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 97 S. Ct. 690, 50 L. Ed. 2d 701 (1977).
As to the nine proceedings involving Zenith workers, we find that they suffer from some of the same relevancy problems as the other trade adjustment assistance investigations and from some additional problems of their own.
First, as we have already noted, in five of the proceedings, the only findings were negative findings—that the statutory criteria for relief had not been met. The discussion of which criterion had not been fulfilled, e. g., production had not declined or increased imports did not contribute importantly to layoffs, is in each case wholly unrelated to any allegation Zenith would seek to prove in this case. In the proceedings in which affirmative determinations were made, those determinations were based on a consideration of imports from all sources and include a finding of injury from competition that may or may not have been unfair. Furthermore, as defendants have pointed out, the injury found is injury to Zenith workers, not to Zenith, who is, after all, the plaintiff here. In fact, in two instances Zenith’s own imports from Taiwan and Mexico were specifically cited as contributing to the increase in imports that led to the injury. Under these circumstances, we conclude that these injury determinations are not relevant to this proceeding.
The Rule 403 considerations that informed our discussion of the Antidumping Act materials are equally relevant here, and so we need but summarize them as applied in the present context. For purposes of analysis we must and do assume that the proffered materials pass the minimal relevancy threshold of Rule 401.
Even given this assumption, however, we conclude that the probative value of the results of the escape clause and trade adjustment assistance proceedings is very low and is far outweighed by the unfair prejudice of introducing findings by governmental agencies that domestic industries, workers, and firms have been injured as a result of increased imports. Cf., Coleman Motor v. Chrysler Corp., 525 F.2d 1338 (3rd Cir. 1975) (error to admit prior jury verdict that defendant had committed antitrust violation). Furthermore, there is the added danger of misleading the jury into thinking that the injury found by the International Trade Commission and the Department of Labor is coterminous with the injury that must be shown in an antitrust case.
Just as we noted in our discussion of the Antidumping Act materials, if these documents are admitted, defendants would be entitled to launch an attack on both their trustworthiness and their probative value—a process that could potentially entail exploring each of the trade adjustment and escape clause proceedings and the significance of the evidence upon which the determinations were based. Given what we have deemed to be at best the limited probative value of these documents, and given the prospect of enormous delay, waste of time, and confusion of the issues such a process would inevitably entail, we can conceive of no circumstances under which we would admit the proffered proceedings at trial.
Finally, we note that these documents are needlessly cumulative of other evidence on the issue of injury to these plaintiffs and to competition in general. See discussion supra at 1184.
In addition to the documents discussed at length above, plaintiffs have submitted in DSS #s 19 through 23 lists of various kinds supplied by the Department of Labor that provide summaries of activities of that agency in connection with its involvement in trade adjustment assistance proceedings. These data compilations are more properly characterized as 803(8)(A) or perhaps 803(8)(B) materials than as 803(8)(C) documents.
DSS #s 19 and 20 are made up of a computer print-out that lists all applications for adjustment assistance and actions taken thereon, filed with the Department of Labor from April 4, 1975, through July 31, 1979. While we have no doubt that this list provides an accurate survey of Department of Labor activities and therefore may be deemed trustworthy as proof that the petitions and actions listed therein were in fact filed and did in fact occur, we question its relevance since it contains applications from workers in all kinds of domestic industries (e. g., shoes, clothing). To the extent that it includes worker applications relating to products at issue in this case, it would appear to be cumulative in light of DSS #s 21 and 22 which list firms producing consumer electronics products whose workers applied for and were certified as eligible to receive trade adjustment assistance benefits under the 1974 Act. The problem with DSS #s 21 and 22 is that the data compilations merely reflect the results of the § 221 proceedings described above and the actions taken in connection therewith, so to the extent that the results of the proceedings are either untrustworthy or irrelevant to issues here, so too would be any substantive inferences that might be drawn from the reports, although as noted, the reports themselves may accurately reflect the actions taken by the Department of Labor.
DSS # 23 is a Department of Labor report summarizing trade readjustment allowance activities and employability services. The data is compiled geographically and then subdivided by investigation number. There is no way to determine what industry each investigation relates to, though if this list were matched with others, identifying both the firm and the investigation number, it would be possible to do so. Standing alone, the list is useless. Like the other listings submitted here, this document can be deemed to accurately reflect only the data recorded and could not in any event be used for substantive proof of any issue here. Thus the miscellaneous documents are inadmissible.
DSS #s 25 and 26 pertain to proceedings before the Japanese Fair Trade Commission (JFTC). In order to understand the nature of those documents, a description of the Law Concerning the Prohibition of Private Monopoly and the Maintenance of Fair Trade, Act No. 54 of 1947 (the “Anti-Monopoly Law”), which is enforced by the JFTC, is necessary. Our information is gleaned from numerous affidavits filed by expert witnesses from both sides, as well as from the testimony of plaintiffs’ expert, Professor John Owen Haley of the University of Washington Law School, and from our independent reading of the Japanese Anti-Monopoly Law and the regulations promulgated thereunder.19
The Japanese Anti-Monopoly Law is similar in purpose to the U.S. antitrust laws. As described in Sec. 1,
This Act, by prohibiting private monopolization, unreasonable restraint of trade and unfair business practices, by preventing the excessive concentration of economic power and by eliminating unreasonable restraint on production, sale, price, technology, and the like, and all other undue restrictions of business activities through combination, agreements, etc., aims to promote free and fair competition, to stimulate the initiative of entrepreneurs, to encourage business activities of enterprises, to heighten the level of employment and peoples’ real income, and thereby to promote the democratic and wholesome development of the national economy as well as to insure the interests of consumers in general.
The Anti-Monopoly Law includes among its provisions a prohibition against private monopolization and unreasonable restraints of trade (§ 3); a prohibition against unfair methods of competition (§ 19); a prohibition against undue disparity of economic power (§8); a prohibition against the formation of holding companies (§ 9); and a prohibition against certain interlocking directorships (§ 13).
The JFTC, similar to our Federal Trade Commission, was established by the Anti-Monopoly Law in order to effectuate the Act’s purposes. While private actions are cognizable under Japanese law, they are extremely rare20 and, for practical purposes, the JFTC is the sole enforcement mechanism of Japanese antitrust law.
The JFTC is an independent governmental agency, composed of a Chairman and four Commissioners, appointed by the Prime Minister, with the consent of both houses of the Diet. The staff of the JFTC, which is broken down into an economic division, a trade practices division, and an investigation division, includes trial examiners selected from staff office personnel, “whose duty it [is] to handle the proceedings,” but who are expressly denied the authority to render any actual decision. Anti-Monopoly Law, Art. 35.
Under the Anti-Monopoly Act and the JFTC’s “Regulation Concerning Investigation and Hearing by the Fair Trade Commission, Fair Trade Commission Regulation No. 5, Oct. 19, 1953, as amended (“Regulations”), JFTC proceedings comprise two principal stages. The first, or investigative, stage culminates in the initiation of a formal action. Under Sec. 45 of the Act and Art. 9 of the Regulations, an investigation conducted by members of the Commission staff may commence either upon the request of an outside party or by the Commission on its own authority. During this preliminary investigation, the staff can move from a highly unstructured initial screening process to a slightly less informal one by invoking certain legal processes to obtain information, including compulsory process, spot inspections, the interrogation of witnesses, the taking of statements, and the use of expert testimony. While the Act provides for notice to be forwarded to a suspected violator and while a respondent can object to a demand for certain information upon an appropriate motion, for the most part the rights accorded a respondent during the investigation stage are limited. There is, for example, no right to cross examination.
At the close of the investigation, a staff report, setting forth the “incipiency” of the violation, the investigative process, a synopsis of the facts of the case, applicable legal provisions, and the opinion of the investigator is transmitted to the Commission. Regulations, Art. 18(2). If the Commission deems a violation to be likely, it issues a “Recommendation” to the respondent. Such a Recommendation includes facts and application of the law, as well as measures to be taken to eliminate the violation. As described in the affidavit of Dr. Ariga, see note 50, supra, the facts set forth in the Recommendation are those which had been set forth in the staff report, and the Commission relies upon that report rather than inquire into the evidence at that preliminary stage. The purpose of the factual recitation is to preclude initiation in the future of any proceedings based upon the same facts, and to provide a context within which the respondent is to take measures to eliminate the suspected violation.
The respondent may either accept or reject the Recommendation. If the Recommendation is accepted, the Commission issues a “Recommendation Decision” without resorting to a hearing. According to the affidavits of both Drs. Matsushita, see note 50, supra, and Ariga, the description of the alleged violation as outlined in the Recommendation Decision is identical to that of the original Recommendation, as required by Sec. 48(4) of the Anti-Monopoly Law. The purpose of this system is to obtain early settlement of disputes.
Should the respondent reject the Commission’s recommendation, the Commission serves a Complaint upon the respondent, thus initiating the second, or hearing, stage of the JFTC’s investigative proceedings. This Complaint sets forth the suggested violation in a manner identical to that of the previously issued Recommendation. At this point, the Commission may appoint a hearing examiner to conduct formal hearings. Unlike the preliminary investigation phase, the respondent is now afforded many legal rights such as counsel, cross-examination, and the presentation of a defense.
At any time after the Complaint is served, but before the Commission renders a final decision, the respondent may agree to entry of a “Consent Decision” by submitting to the Fair Trade Commission a written statement setting forth that he admits the findings of fact and the application of law in the said complaint, and that he will rather accept a decision without resorting to the subsequent proceedings and [filing] therewith a plan regarding concrete measures to be taken by him in order to eliminate such violation.
Japanese Anti-Monopoly Act, § 53-3. Further proceedings are then aborted, and the Commission enters a Consent Decision. We credit the affidavit testimony of Drs. Matsushita and Ariga to the effect that no negotiation is permitted at this juncture. As with the Recommendation Decision, if a respondent wishes to end the proceedings, he is faced with a “take it or leave it” proposition. Section 53-3, quoted above, requires respondent to admit the allegations of the Complaint and does not permit modification. In fact, in Mrs. Ariga’s lengthy experience with the Commission, each Consent Decision has repeated verbatim the allegations of the Complaint, and does not take into consideration any evidence adduced during hearings which may have been held in the interim. As with the Recommendation Decision, the purpose of this requirement is to expedite resolution of the matter.
If no Consent Decision has been entered, the examiner, following the conclusion of the hearings, submits a report, together with the entire record of the case, to the full Commission. This report, which defendants translate as “Draft of Decision,” but which plaintiffs translate as “Initial Decision,” contains a statement of the facts, evidence, application of the law, and a proposed order. Subsequently, the full Commission reviews the document and, after consideration of the entire record, issues its Decision in the proceedings. The Commission may issue a decision identical to the examiner’s report, remand the case to the examiners, initiate its own hearings, or decide to terminate the proceedings.
It should be noted again that the hearing examiner has no authority to issue a decision that is legally binding upon the respondents. Under Sec. 35(2) of the Anti-Monopoly Act, the hearing examiner is expressly precluded from issuing a decision. He does have authority under the accompanying Regulations to submit to the Commission a report of the hearings in the form of a draft of decision, or initial decision, providing the Commission with materials for its consideration in its ultimate decision-making role. The Commission may not rely upon the judgment of the hearing examiner in rendering its decision; rather it must, pursuant to Article 69 of the Regulations under the Act, examine the entire record itself, including all testimony and evidence taken. The Commission then renders its Formal Decision, stating findings of fact and application of the law.
In summary, there are three types of decisions which the Commission may make: a Recommendation Decision based upon the initial informal investigative report; a Consent Decision, based upon the allegations of the Complaint which is in turn based upon the Recommendation; and a Formal Decision following hearings and submission of a report by the Hearing Examiner. Alternatively, the Commission may issue an Order to Terminate the proceedings.
We have before us documents pertaining to two separate cases before the JFTC.21 For the sake of clarity, we will discuss these cases in chronological order, which will allow us to discuss the simpler case first, although plaintiffs have reversed that order in their document submissions.
In DSS 26, plaintiffs seek to introduce a single document: a Recommendation Decision entered into in JFTC Case No. 5 of 1957, which was brought against the Home Electric Appliance Market Stabilization Council, six of whose members are defendants in this action, see n. 5, supra, and the National Federation of the Associations of Radio and Electric Appliance Dealers (NFA). The Council was an industry-wide group formed, in plaintiffs’ submission, to “stabilize” the domestic market in consumer electronic products by setting and maintaining artificially high prices and by policing the agreements reached by its members. On September 30, 1957, presumably after a preliminary informal investigation, the JFTC served a Recommendation upon the Council and the NFA alleging various violations of the Anti-Monopoly Act and proposing a cease and desist order.
The Council and the NFA decided to accept the Recommendation. Accordingly, only two and one-half weeks after issuance of the Recommendation, on October 17, 1957, a Recommendation Decision was issued. As indicated supra, the Recommendation Decision was identical to the Recommendation. It is the Recommendation Decision which plaintiffs seek to introduce in DSS 26. The record contains no information as to the actual investigative steps taken, i. e., what if any of the measures available to the investigators were in fact used. Professor Haley agreed that there was no mandate under the JFTC statute or regulations which required any particular steps to be taken in any particular case. See n. 62, infra.
DSS 25 consists of a series of documents related to JFTC Case No. 4 of 1967, brought against Matsushita Electric Industrial Co., Ltd. (MEI) charging certain resale price maintenance practices directed towards MEI’s Japanese wholesalers. Plaintiffs contend that MEI’s supposed resale price maintenance activities were an implementation by that company of all defendants’ conspiracy to stabilize the Japanese domestic market at artificially high prices, one of twin foci of plaintiffs’ theory of the case. On July 21, 1967, presumably following the initial informal investigatory activities outlined above (there is again nothing in the record regarding the actual investigative steps taken), the JFTC began formal proceedings against MEI by issuing a Recommendation seeking to require the elimination of MEI’s alleged resale price maintenance activities (DSS 25-A). The text of the factual recitation and application of the law which accompanied the Commission’s Recommendation is set out in the margin.22
Unlike the Market Stabilization Council, on August 3, 1967, MEI rejected the Recommendation, outlining its reasoning in an accompanying letter (DSS 25-B & C). Therefore, on August 14, 1967, the JFTC notified MEI that a hearing date had been set and issued a Complaint, labelled “Opening Statement of the Hearing.” (DSS 25-D & E).23 This Complaint was identical to the previously issued Recommendation.24 MEI denied the primary allegations, setting forth its position in a brief-like “Surrogate’s Preparatory Document” (DSS 25-F) dated November 22, 1967, after the commencement of the hearings.
Between September 8, 1967 and May 8, 1969, 28 hearings were held, during which 48 witnesses either testified, submitted statements, or both, and 214 exhibits were introduced. At the, conclusion of the hearings, the hearing examiner prepared, pursuant to the procedures outlined supra, his initial, or draft, decision (DSS 25-G), recommending a finding that MEI had violated the Anti-Monopoly Law. MEI objected to the Draft, DSS 25-H & I, but ultimately, before the Commission itself acted on the Draft, agreed to entry of a Consent Decision on March 13, 1967 (DSS 25-J). In order to agree to the Consent Decision, it was necessary for MEI to withdraw its statement of objections (DSS 25-K) and submit a proposal for compliance with the Decision (DSS 25-L), and subsequently to report on measures taken pursuant to the Decision (DSS 25-M).
It is noteworthy that, in accordance with the procedures outlined supra, the facts recited in the Consent Decision are identical to those in the Complaint; in fact, the Commission, in entering the judgment, merely appended the Complaint in support of the Consent Decision.
Plaintiffs seek to introduce all of the aforementioned JFTC documents as public records and reports under F.R.E. 803(8)(C); in addition, they contend that the documents constitute admissions of a party, rendering them admissible under Rule 801(d)(2) as well.
Defendants contend that the documents in both cases are analogous to unlitigated consent decrees, and are therefore inadmissible under Rule 408, which excludes evidence adduced in settlement negotiations, or alternatively under Rule 410, which excludes withdrawn guilty pleas, pleas of nolo contendere, and offers to plead guilty or nolo contendere, as well as statements made in plea negotiations. Similarly, defendants argue that the documents are inadmissible under the proviso to § 5(a) of the Clayton Act, 15 U.S.C. § 16(a). Sec. 5(a) gives prima facie evidentiary effect to a previous antitrust judgment against a given defendant in an action brought by the United States when that judgment is introduced in a subsequent private action, but the proviso specifies that the section does not apply to consent judgments or decrees. See n. 67 infra.
Even if the documents are not excluded under Rule 408 or 410 or § 5(a) of the Clayton Act, defendants argue that they do not constitute admissions, and further, that they are hearsay and not public records within the meaning of the 803(8)(C) exception to the hearsay rule because they are not “findings.” While they do not maintain that the JFTC proceedings were untrustworthy in the same way that they argue the Treasury and Tariff Commission proceedings were flawed, defendants do call our attention to a number of factors which might render the JFTC documents untrustworthy under the criteria we have developed in Part II, supra. Thus, although there was some confusion at oral argument as to whether a trustworthiness objection was being pressed, see transcript, Pretrial Order No. 260 at 228-29, 245, and 250-51, it is clear that the trustworthiness of the JFTC documents as proof of the truth of the statements therein contained is at issue.
Finally, defendants argue that the documents are totally irrelevant to this case, in that they deal solely with an alleged domestic market conspiracy, and that, even if there were some limited probative value, it would be overwhelmingly outweighed by the “danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence” so as to be excludable under F.R.E. 403.25
Consistent with the earlier segments of this opinion, we will first address the hearsay question, and then turn to defendants’ contentions regarding Rules 408 and 410 and § 5(a) of the Clayton Act, and finally to the other relevancy objections.
For the reasons which follow, we hold that the documents of the proceedings before the Japanese Fair Trade Commission are not admissible under the exception for public records and reports. Just like the documents discussed in Parts III and IV, supra, these documents are plainly hearsay, and therefore not admissible unless they fall into one of the hearsay exceptions. Again, the only relevant exception appears to be 803(8)(C); and again, defendants argue that the documents are not findings within the meaning of 803(8)(C), and that they are not trustworthy under the principles governing that section.
We explained in Part II, supra, why the public records and reports that are admissible under 803(8)(C) are limited to “findings,” and why other items in the record of an administrative proceeding are not included under that rubric. The only documents before us which are even arguably findings are the Recommendation Decision in the Market Stabilization Council case, DSS 26, and, with respect to the resale price maintenance case against MEI, the Recommendation, DSS 25-A, the Opening Statement of the Hearing, or Complaint, DSS 25-E,26 the Initial Decision (or Draft of Decision), DSS 26-G; and the Consent Decision, DSS 25-L.27
We discussed in both Parts II and III the problem of defining a finding for purposes of 803(8)(C) when a document represents a step in a process which is subject to further review, and concluded that generally it was preferable to treat it as a finding subject to review in terms of the trustworthiness criteria which we have developed.
The factual recitation set forth in the Recommendation Decision in the Market Stabilization Council case, DSS-26, was based entirely upon the initial informal investigation of the Commission’s staff. The affidavits make plain that the Commission makes no review of the evidence at this stage of the proceedings. No hearings were held. The text of the Recommendation prepared by the investigative staff automatically became the text of the Recommendation Decision, as required by Sec. 48(4) of the Anti-Monopoly Law.28 Moreover, a number of decisions by the Japanese Supreme Court state that the Recommendation Decision does not conclusively determine the existence of a violation, that a formal finding by the Commission that a violation exists is not a prerequisite for a Recommendation Decision, and that whether or not violations did in fact exist does not affect whether or not the Recommendation Decision is appropriate. See, e. g., Idemitsu Kosan K.K. v. Kosei Torihiki I’lnkai, 32 Minshu 515 (April 4, 1978) (Supreme Court of Japan, 3d P.B.).29
Furthermore, the Japanese Supreme Court decisions make plain that a Recommendation Decision in no way constitutes formal findings of fact by the Commission. At most, the document represents factual findings of the staff, and not of the Commission.30
As we have observed in Part II, however, we agree with plaintiffs that 803(8)(C) findings need not be limited to those of the formal body, but that staff findings, “resulting from an investigation made pursuant to authority granted by law,” may also be included. Cf. United States v. Corr, 543 F.2d 1042, 1051 (2nd Cir. 1976). Therefore, consistent with the approach outlined in Part II, we will examine the “findings” according to the trustworthiness criteria we have developed supra.
With respect to the Advisory Committee’s four criteria, we have no reason to question the timeliness of the investigation or the skill and experience of the staff members involved. However, as to the third criterion, no hearing was held. Moreover, serious questions of motivation, the fourth criterion, arise from the fact that the factual “findings” of the Recommendation, which are copied verbatim without review into the Recommendation Decision, are the precursor to the charging document which initiates the prosecution, much as the facts gathered in a grand jury investigation are those resulting in an indictment. The factual findings in both cases are then memorialized in documents whose purpose is not to “find” facts but to accuse. Additionally, the administrative or judicial process which these documents initiate is predicated upon the notion that these accusatory findings are preliminary and likely to be revised in the de novo proceedings to follow. In this latter regard, we note that: (1) the “findings” are made at the earliest possible stage of the proceedings, at which the respondent has enjoyed few procedural rights; (2) the “findings” are based upon an informal investigation in which hearsay and ex parte information play a substantial and apparently dominant role; and (3) there is no record of the proceedings.31
We find that the preliminary investigation leading up to a Recommendation, after which formal proceedings are to commence, is simply too preliminary to be trustworthy within the meaning of 803(8)(C), and that the document relied upon as the distillation of the investigation, because it is accusatory in nature, cannot be deemed a trustworthy finding. The fact that the Commission converts the Recommendation into a Recommendation Decision following acceptance by the respondent does not alter the analysis, for it has been thoroughly documented that the Recommendation Decision does not constitute fact-finding by the Commission. See p. 1179, supra.
If the Recommendation Decision in the Market Stabilization Council case is not trustworthy enough to be admissible, then neither is the Recommendation in the MEI case. The Complaint in the MEI case is identical to the Recommendation, was in fact copied directly from the Recommendation without additional review, and therefore suffers from exactly the same weaknesses. While based upon staff findings, it is nonetheless an accusatory document, and given its etiology, is still too preliminary in nature to be 803(8)(C) material.
The Consent Decision is also identical to the Complaint. As is discussed in detail in connection with our analysis under Rule 410, infra, the Consent Decision does not take into account any evidence adduced during the hearings. Rather, the respondent must consent to entry of a decision based solely upon the allegations of the Complaint, as required by Sec. 53(3) of the Anti-Monopoly Law; negotiation is not permitted. See p. 1176, supra. Thus, the fact that the decision was entered after hearings were held is irrelevant to the analysis, for the “facts found” are identical to and are rooted in the preliminary facts set forth in the Complaint. Therefore, the Consent Decision too is inadmissible.
The Draft of Decision is the only document which includes facts found after hearings, based upon evidence adduced at the hearing. We need not extend this very long opinion by explaining its status within the meaning of 803(8)(C), given its ultimate reviewability by the Commission itself, for the Draft Decision was superseded in this case by the Consent Decision. Consistent with the conclusions set forth in Part II, we do not believe that Rule 803(8)(C) contemplates receipt in evidence of what is essentially a staff report which has no legal effect because of the subsequent entry of the Consent Decision.
Thus, we find that defendants have met their burden of showing that the documents offered in DSS #s 25 and 26 are untrustworthy. Accordingly the documents do not meet the requirements of Rule 803(8)(C) and constitute inadmissible hearsay.
F.R.E. 408 excludes from evidence matters pertaining to settlement negotiations and agreements;32 F.R.E. 410 excludes from evidence withdrawn pleas of guilty, pleas of nolo contendere, and offers to plead guilty or nolo contendere, as well as statements made during plea negotiations.33