The United States Department of Justice filed a civil antitrust suit against IBM in January of 1969 (United States v. IBM, 69 Civ. 200 (S.D.N.Y. 1969), asserting violations of section 2 of the Sherman Act, 15 U.S.C. §2) alleging that the computer manufacturer was monopolizing, and attempting to monopolize, the market for “general purpose electronic digital computers.” What followed was a nearly unfathomable exercise in excessive, aimless and abusive litigation spanning more than a decade: touching five presidential administrations (from Johnson to Reagan), involving hundreds of witnesses and nearly 20,000 evidentiary exhibits (see generally Lopatka, John E. “UNITED STATES V. IBM: A MONUMENT TO ARROGANCE.” Antitrust Law Journal, vol. 68, no. 1, 2000, pp. 145–162. JSTOR, www.jstor.org/stable/40843461), with no fewer than eight (8) appellate decisions rendered before the case finally ended in 1982 by the command of the United States Court of Appeals for the Second Circuit. It is a striking example of profound institutional failure at both the trial and appellate levels – for which the parties paid the price (estimated to be in the hundreds of millions of dollars over the case’s lifetime – see Lopatka, id.). Improvidently brought and prejudicially adjudicated, the United States’ 1969 Sherman Act claim against IBM is discussed here as the next installment of a continuing focus on case studies involving judicial overreaching.
Chief Judge David N. Edelstein of the United States District Court for the Southern District of New York began presiding over the case on January 26, 1972, just over three years after it was filed, and he would continue to oversee it until its surreal conclusion. No analysis of this extraordinary litigation would be complete or accurate without some understanding of Judge Edelstein as a person and as a jurist.
As a person, he was a mentor, family man, patron of the arts and well-liked by his colleagues. See (Judge) Duffy, Kevin T., Dedication: David N. Edelstein: A Personal Remembrance, 69 Fordham L. Rev. 3 (2000), https://ir.lawnet.fordham.edu/flr/vol69/iss1/2/. He obtained his undergraduate, master’s and law degrees from Fordham University, after which he entered the private practice of law in New York City. See https://www.fjc.gov/node/1380366. From there he transitioned to Government work as a Claims Division attorney for the U.S. Department of Justice beginning in 1944, and remained a federal prosecutor as he occupied various other positions throughout the Justice Department until his eventual appointment to the federal bench by President Harry S. Truman in 1951. Id.
As a judge, Edelstein distinguished himself by remaining on the bench longer than any of his peers; his judicial career ended only upon his death at age 90 in 2000 (at which point his docket remained active). See David N. Edelstein, 90, Judge in Federal Court for 48 Years, The New York Times, August 21, 2000,https://www.nytimes.com/2000/08/21/nyregion/david-n-edelstein-90-judge-in-federal-court-for-48-years.html. In addition to the Government’s 1969 antitrust case against IBM (the “1969 case”), Judge Edelstein’s career was notable for two other high-profile cases over which he presided: yet another, earlier civil antitrust case against IBM filed by the United States in 1952 (the “1952 case”); and a 1988 case brought by the United States against, among others, the International Brotherhood of Teamsters under the Racketeer Influenced and Corrupt Organizations Act of 1970. All three of these cases share a peculiar commonality – excessive length.
The 1952 case lasted a stunning forty-four years until a settlement was finally reached in June of 1996; the settlement contemplated an additional five years before a consent decree – to which IBM initially agreed back in 1956 – was fully dissolved. See https://www.justice.gov/archive/atr/public/press_releases/1996/0715.htm.
The 1988 RICO case against the Teamsters was still pending at the time of Judge Edelstein’s death in August of 2000. The parties were actively litigating the Teamsters’ ongoing compliance with a consent decree to which it had agreed in 1989, almost immediately after the case was filed against it. See David N. Edelstein, 90, Judge in Federal Court for 48 Years, supra; see also Monitors Ordered for Teamster Voting, The New York Times, July 11, 1990, https://www.nytimes.com/1990/07/11/us/monitors-ordered-for-teamster-voting.html.
To be fair, IBM and the Teamsters agreed with the Government in both the 1952 case and the 1988 RICO litigation, respectively, to enter into “consent decrees” – judgments entered by the Court with terms agreed to by the parties, and which expressly contemplated Judge Edelstein’s continuing oversight. In other words, the 1952 case and the Teamsters RICO litigation were intended by the parties and the Court alike to remain pending indefinitely (or at least until the Government’s concerns had been resolved).
Not so with the 1969 case. There was no early agreement between the parties, and Judge Edelstein was not being asked to supervise IBM’s compliance with a consent decree that was never entered. This was instead a case that should have been promptly litigated to a conclusion: either awarding the United States the structural relief sought, or denying any such relief and dismissing the case if the Court determined that IBM was acting lawfully. The need for a prompt resolution in antitrust actions which pertain to the computer industry, like those brought against IBM, is particularly acute because of how quickly technological advances tend to render anticompetitive behavior obsolete. As the United States Court of Appeals for the District of Columbia Circuit trenchantly observed:
“As the record in this case indicates, six years seems like an eternity in the computer industry. By the time a court can assess liability, firms, products, and the marketplace are likely to have changed dramatically. This, in turn, threatens enormous practical difficulties for courts considering the appropriate measure of relief in equitable enforcement actions, both in crafting injunctive remedies in the first instance and reviewing those remedies in the second. Conduct remedies may be unavailing in such cases, because innovation to a large degree has already rendered the anticompetitive conduct obsolete (although by no means harmless). And broader structural remedies present their own set of problems, including how a court goes about restoring competition to a dramatically changed, and constantly changing, marketplace.” U.S. v. Microsoft Corp., 253 F.3d 34, 49 (D.C.Cir.2001)
This was especially true of the 1969 case. At its inception, it focused upon IBM’s marketing of its “System/360” mainframe computers – about the size of a large refrigerator. See https://www.computerhistory.org/revolution/mainframe-computers/7/161/565. By the time the case ended in 1982, the personal computer revolution was well underway and the System/360 mainframe was no longer being made. See Business: The Case of the Century, Time, May 21, 1979, http://content.time.com/time/subscriber/article/0,33009,920363-1,00.html. As a result, the case became what an IBM competitor called “an historical curiosity” because the relevant market evolved through several technological generations while the litigation remained pending. See U.S. vs. I.B.M., The New York Times, February 15, 1981, https://www.nytimes.com/1981/02/15/business/us-vsibm.html. The parties were thus fighting over conduct that had long since ended, which is probably why the Justice Department attorneys assigned to the case eventually resorted to new discovery requests – propounded well after the Government concluded its trial presentation, while IBM was in the midst of presenting its defense – in an effort to uncover new misconduct by the computer manufacturer about which to cross-examine defense witnesses. See Business: The Case of the Century, supra.
Antitrust remedies intended to restore competition are meaningless if the litigation drags on for so long that it becomes moot due to the natural evolution of the relevant market. It is therefore difficult to view the 1952 and 1969 cases as sound expenditures of judicial resources; both cases belatedly ended by agreement of the parties (but not of the Court, as will be discussed below), following years of changing market conditions rendering the Government’s claims stale. Did Judge Edelstein allow (require?) these cases to remain pending for so long in an altruistic effort to protect society from IBM’s predation? Or was the litigation ultimately nothing more than gratification of the Court’s personal bias against the company?
The 1969 case contains many indications of the latter. The first harbinger of trouble for IBM materialized eight months to the day after Judge Edelstein was assigned to the case. On September 26, 1972, he entered what was known as “Pretrial Order No. 5” requiring IBM to produce approximately 1,200 documents it claimed to be privileged. See International Business Machines Corp. v. United States, 471 F.2d 507, 509 (2d Cir.1972) (full text of the opinion here). The documents in question derived from IBM’s involvement in yet another pending civil antitrust suit (Big Blue was a popular target throughout the 20th century), this one involving multiple cases consolidated against it in the U.S. District Court for the District of Minnesota and filed by various competitors (including Control Data Corporation) rather than by the United States.
In an effort to expedite the pace of that litigation (and in stark contrast to the glacial pace of the 1952 and 1969 cases), the Minnesota Court ordered the parties to exchange massive amounts of documentary discovery over a short period – resulting in IBM frantically producing some 17 million pages within three months. Unsurprisingly, a certain number of documents claimed to be privileged were mistakenly included in this hurried and voluminous production. The Minnesota Court therefore ruled, with eminent fairness (since the issue arose as a direct result of the Court’s accelerated time frame), that any unintentional production of privileged documents would not result in a waiver. IBM could still assert any applicable privileges in an effort to prevent the use of such documents at trial.
When prosecuting the 1969 case, the Department of Justice was very much aware of the pendency of the Minnesota litigation and realized that the ongoing discovery in that case could be useful in the 1969 case. It thus agreed with IBM to accept copies of the documents produced to Control Data Corporation in the Minnesota litigation – with the express stipulation that IBM could withhold from that production all of the items it claimed were privileged. Perhaps sensing that the Court was unhappy with the computer manufacturer, however, the Government in the 1969 case eventually argued to Judge Edelstein that IBM’s unintentional delivery of privileged documents to Control Data Corporation should be deemed a waiver. Directly contrary to its stipulation with IBM, therefore, the Government sought to compel the computer manufacturer to produce the withheld documents based upon the very waiver argument that had previously been rejected in Minnesota. Judge Edelstein eagerly accepted the Government’s invitation.
Upon entry of Pretrial Order No. 5 in the 1969 case, IBM petitioned the United States Court of Appeals for the Second Circuit for a writ of mandamus to vacate such ruling. Initially, at least, the Second Circuit was sympathetic to IBM’s plight. In a split decision, a majority of the Circuit Court found that Pretrial Order No. 5 “constitutes a clear abuse of discretion requiring immediate review by extraordinary writ.” It therefore vacated Judge Edelstein’s order and instructed the District Court to enter a new discovery order expressly preserving IBM’s right to seek a judicial ruling upon any of its privilege claims.
Notably, Second Circuit Judge William Hughes Mulligan dissented. He opined that the Expediting Act (15 U.S.C. §29) deprived the Circuit Court of jurisdiction to hear the appeal, and that IBM’s only recourse was to appeal directly to the Supreme Court after Judge Edelstein entered a final judgment at the conclusion of the case. Judge Mulligan would have therefore left Pretrial Order No. 5 intact and allowed the Government to freely use the documents as to which IBM was claiming privilege – a harsh outcome, considering that any resulting damage would occur long before an appeal from the final judgment could be pursued.
Judge Mulligan’s dissent is also interesting on a superficial level, in that he shared his alma mater with Judge Edelstein; both jurists earned their law degrees from Fordham. Adding to this coincidence is the historical fact that both judges sat on the same special panel overseeing a 1971 lawsuit filed by the New York Patrolman’s Benevolent Association, which challenged penalties imposed by the City upon police officers who went on strike in January of that year. See City Wins Sanction to Fine Policemen, The New York Times, July 28, 1971, https://www.nytimes.com/1971/07/28/archives/city-wins-sanction-to-fine-policemen.html. And as per Judge Duffy’s Dedication: David N. Edelstein: A Personal Remembrance, supra at 5, Judge Edelstein along with his wife Florence “hosted parties for judges from the Southern District and the Second Circuit in their Park Avenue apartment.” Might Judge Mulligan have been in attendance during any of these parties?
Without being privy to any interactions between them, it is impossible to characterize the relationship shared by Judges Edelstein and Mulligan. But the foregoing coincidences, along with the tenor of Judge Mulligan’s appellate rulings which (as will be referenced below) often favored Judge Edelstein’s decisions throughout the 1969 case, make it equally impossible to discount the possibility of cronyism.
Indeed, the Second Circuit soon signaled its support of Judge Edelstein’s management of the 1969 case in February, 1973 when it granted a rehearing en banc as to its earlier decision vacating Pretrial Order No. 5, less than two months after it had initially found that order to be “a clear abuse of discretion.” See International Business Machines Corp. v. U.S., 480 F.2d 293 (2d Cir.1973) (full text of the opinion here). In a 4-2 majority opinion authored by – coincidentally –Judge Mulligan, the Circuit Court adopted the reasoning outlined in Judge Mulligan’s earlier dissent and decided that it lacked jurisdiction to review Pretrial Order No. 5. As a result, IBM found itself stuck with Judge Edelstein’s ruling requiring it to produce the items claimed to be privileged, without ever having those claims of privilege adjudicated by the District Court. IBM thus appeared, some 4 years into the litigation, to be battling three adversaries: in addition to the war of attrition being waged against it by the United States, the computer manufacturer was contending with hostile rulings from Judge Edelstein along with the laissez-faire oversight of the Second Circuit.
Perhaps emboldened by the Circuit Court’s about-face in refusing to vacate Pretrial Order No. 5, Judge Edelstein soon thereafter found IBM in contempt for its continuing failure to produce its documents claimed to be privileged. See International Business Machines Corp. v. U.S., 493 F.2d 112 (2d Cir.1973) (full text of the opinion here). The penalty imposed was severe, even for a multi-billion dollar corporation: a daily(!) fine of $150,000.00, for each day it failed to produce the withheld documents. IBM opted to immediately seek appellate review of this draconian sanction.
The Second Circuit was unmoved. In a majority opinion (unsurprisingly) joined by Judge Mulligan, the Court of Appeals once again reasoned that it lacked jurisdiction to hear the appeal – just as it had concluded with respect to IBM’s earlier challenge to Pretrial Order No. 5. After rejecting every argument raised by Big Blue, the majority dismissed the appeal and denied the computer manufacturer’s mandamus petition – thereby dooming IBM to contend with the eye-watering daily fine imposed by Judge Edelstein’s contempt order. The Second Circuit’s decision in this regard crystallized IBM’s worsening dilemma: the District Court was punishing the corporation, seemingly unchecked by an apathetic court of appeals, in litigation which at that point had been pending for nearly five years and with no end in sight. This is a terribly bleak scenario for any litigant, even one with the financial might of IBM.
The absurdity of the contempt sanctions imposed upon the computer manufacturer was not lost on Second Circuit Judge William H. Timbers. In a scathing dissent, he marveled at the more than $1,000,000.00 fine accruing weekly in the absence of any judicial review of IBM’s privilege claims. Judge Timbers’ outrage is palpable. The dissent emphasizes the frustration of IBM’s predicament in having to choose between sacrificing its attorney-client privilege or suffering a monstrous fine; one which was neither related to the extent of its disobedience, nor any harm suffered by the Government from IBM’s refusal to produce the documents in question.
Judge Timbers had a point. IBM did nothing to merit the punishment imposed by the District Court. Its only sin was reaching an agreement with the Government to preserve IBM’s privilege claims, upon which agreement the Government promptly reneged, resulting in the blanket rejection of those privilege claims under pain of exorbitant financial penalties. These circumstances irresistibly lead to the conclusion that Judge Edelstein was intentionally tormenting the corporation.
As the 1969 case continued, the computer manufacturer’s treatment at the hands of the District Court did not improve. The litigation made its way up to the Second Circuit yet again in 1975 after Judge Edelstein imposed a series of new restrictions upon IBM’s defense. See International Business Machines Corporation v. Edelstein, 526 F.2d 37 (2d Cir.1975) (full text of the opinion here). This prompted the company to again seek mandamus relief in response to what was clearly becoming a pattern of abuse from the Trial Court.
In a unanimous opinion (notably, one to which Judge Mulligan did not contribute), the Second Circuit roundly condemned a series of arbitrary impediments required by Judge Edelstein which hampered IBM’s ability to conduct its defense. These included: a) a prohibition upon IBM privately interviewing prospective trial witnesses; the company was instead required to either conduct such interviews in the presence of Government attorneys, or to have the interviews transcribed by a court reporter (as per Judge Edelstein’s instructions, so as to enable “the Court to see it”); b) bizarrely, IBM was required to send all documents it intended to file in the case directly to Judge Edelstein rather than file them with the clerk; the District Court would then determine whether to forward each item to the clerk for filing (and various items would instead be withheld from filing, thereby interfering with IBM’s ability to create an appellate record); and c) the computer manufacturer was prohibited from making speaking motions during trial, which by that point was underway; IBM was instead required to make any trial motions in writing and, in most instances, filed at least ten days in advance of any hearing.
The Second Circuit was polite, but firm: it unequivocally held that these restrictions jeopardized IBM’s entitlement to fairly present its defense, and that Judge Edelstein exceeded his authority in imposing them. It overturned the limitations precluding the company from interviewing witnesses confidentially. Characterizing Judge Edelstein’s arbitrary requirement for IBM to submit intended filings directly to the Court instead of allowing the items to be filed with the clerk as “an impermissible interference with petitioner’s right to make the record it chooses for purposes of appeal”, the Circuit Court eliminated that restriction as well. So too was Judge Edelstein’s prohibition on oral motions at trial; the Second Circuit summarily rejected the restriction as something “the trial court cannot” do. As a result, every aspect of IBM’s 1975 mandamus petition was granted in a rare appellate victory amidst the ongoing, and still far from over, 1969 case.
By this point in the District Court proceedings, the corporation had been repeatedly brutalized by a series of harsh rulings from Judge Edelstein. IBM’s privilege claims were rejected out of hand; the corporation was then subjected to a draconian, $1 million–a-week fine; and once the bench trial commenced, its defense was hamstrung by arbitrary impediments seemingly designed only to sabotage the computer manufacturer’s case. Any one of these circumstances, considered alone, would justifiably raise concerns over the Trial Court’s apparent lack of impartiality. Collectively they establish a clear pattern of bias against IBM.
This pattern was not lost on the corporation. After enduring years of hostility from the bench and presumably agonizing over the appropriate strategy with its litigation counsel, IBM ultimately made the precarious decision to seek Judge Edelstein’s recusal. On July 19, 1979, the corporation filed an affidavit signed by five of its directors which stated a conclusion that was by then obvious: “We believe that Chief Judge David N. Edelstein, the Judge presiding over the trial in the above-captioned action, has a personal bias and prejudice against IBM and in favor of plaintiff, that his impartiality in this action may reasonably be questioned, that he has a bent of mind that will prevent impartiality of judgment, and that his bias and prejudice could not have come from any source other than an extrajudicial source.” See United States v. International Business Machines Corporation, 475 F.Supp. 1372 (S.D.N.Y.1979) (full text of the opinion here).
Judge Edelstein’s reaction to IBM’s 1979 recusal affidavit was predictable: he unhesitatingly rejected it on both procedural and substantive grounds. Procedurally, the District Court determined that the corporation waited too long to seek recusal. Judge Edelstein relied upon rather dubious statistics in concluding that recusal was sought too late; he noted that the 1969 case had been under his supervision by that point for more than seven years, with over six hundred days of trial spanning 90,000 transcript pages and encompassing over 8,000 exhibits. Thus, he reasoned, the “obligation to continue presiding” over the 1969 case outweighed recusal due to the litigation’s length and scale. This of course presumes that such expenditure of scarce judicial resources was fruitful; that some salutary outcome had been, or would be, realized. If the litigation was instead, as then-Yale law professor Robert Bork put it, “the antitrust division’s Vietnam”, see Business: The Case of the Century, supra, the excessive length and scale of the 1969 case would instead heavily militate in favor of recusal.
But Judge Edelstein clearly had no intention of relinquishing his jurisdiction. Even after disposing of IBM’s affidavit as untimely, he went on to consider whether the corporation had substantively demonstrated bias or prejudice. He unsurprisingly found none, after systematically attacking each example raised by Big Blue. The objections and motions filed by IBM throughout the 1969 case which were largely denied by the District Court were indicative only of a “lack of merit” rather than the Court’s bias. The incessant interruptions by Judge Edelstein of testimony given by IBM’s trial witnesses were due only to “misleading and ambiguous questions” asked of them by defense counsel rather than any prejudice emanating from the bench. And the outright hostility repeatedly displayed by the Court towards defense counsel could not be imputed to IBM itself for purposes of disqualifying Judge Edelstein; he instead concluded that even if his disparaging remarks towards counsel were “unjustified, they were prompted by a judicial opinion of counsels’ conduct, and do not serve as evidence of extrajudicial bias or prejudice.” Even where the corporation painstakingly detailed examples of the Trial Court continuing to refuse to file IBM’s papers with the clerk (in stark violation of the Second Circuit’s earlier mandate) and – rather astonishingly – making “secret alterations to” and deletions from the trial transcript, any suggestion of bias or prejudice was brushed aside by a defiant Judge Edelstein.
The corporation was consequently forced to pursue a familiar strategy: it yet again petitioned the Second Circuit for a writ of mandamus, this time for purposes of having Judge Edelstein removed from the 1969 case. See In re International Business Machines Corp., 618 F.2d 923 (2d Cir.1980) (full text of the opinion here). In what was the litigation’s final display of apparent favoritism by the Court of Appeals towards the District Court (notably, Second Circuit Judge Mulligan would resign from the bench a year later, see https://www.fjc.gov/node/1385481), the Second Circuit essentially rubber-stamped Judge Edelstein’s rejection of IBM’s recusal affidavit in a unanimous opinion authored by none other than Judge Mulligan himself. Determining that IBM’s claim of prejudice was exclusively premised upon “conduct and rulings in the case at hand” rather than “any personal connection, relationship or extrajudicial incident which accounts for the alleged personal animus of the trial judge”, the Second Circuit concluded that the company failed to demonstrate the extrajudicial bias needed to disqualify Judge Edelstein. Similarly, the Court of Appeals agreed with the District Court that the sheer length of time the case had been pending, along with the “immense” investment of labor by all concerned, made the prospect of requiring a replacement judge to retry the case seem “catastrophic.” Thus, IBM was effectively trapped in abusive litigation at least partly because the abuse had been ongoing for so long already. And it is ironically doubtful that the company’s efforts to recuse Judge Edelstein would have succeeded if pursued earlier; the District Court (and Judge Mulligan alike) would certainly have rejected such efforts as premature and unsupported by sufficient evidence of bias. The computer manufacturer’s predicament was hopeless.
Approximately a year into the Reagan administration, the Government finally conceded that the 1969 case was itself hopeless, as well. Assistant Attorney General William F. Baxter, along with counsel for IBM, jointly filed a stipulation for dismissal of the litigation on January 8, 1982 nearly thirteen years to the day after its unfortunate commencement. See In re International Business Machines Corporation, 687 F.2d 591 (2d Cir.1982) (full text of the opinion here). By so stipulating, the United States was acknowledging the absence of merit to its claims against the corporation and that further litigation would be futile. It thus appeared that IBM had mercifully reached the end of its torment at the hands of the District Court, to the extent that Judge Edelstein could no longer preside over a case voluntarily dismissed by the parties.
Initially, at least, the Court was resigned to the unexpected termination of the lawsuit. At the January 8th hearing during which the Government announced the stipulation, Judge Edelstein explained for the benefit of observers in the courtroom that “[t]he Court … has no control whatsoever over the actions of counsel or the judgment they have exercised. The stipulation between the parties is not a judgment or order of the Court.”
But Judge Edelstein was not ready to quietly step aside from the 1969 case based only upon the agreement of the parties. He soon thereafter made clear his various concerns with the stipulation for dismissal, beginning with a Wall Street Journal article published on January 26, 1982 in which he “sharply criticized” Mr. Baxter’s decision to drop the litigation and claimed that the Assistant Attorney General was “running roughshod” over his trial team. He then refused to enter orders proposed by the parties which would have eliminated the need to retain billions of pages of documents pursuant to pretrial rulings requiring the preservation of such documents – none of which had been admitted into evidence or otherwise used during the trial. Despite two affidavits filed by IBM attesting to the millions of dollars in expenses accruing as a result of the document preservation orders, Judge Edelstein insisted on maintaining the status quo because “(i)t is especially important in cases of historical significance that the record remain intact for those who seek to inspect it.”
But there was much more than a desire to preserve the factual record behind the District Court’s continuing jurisdictional exercises in the face of the parties’ stipulation. At a March 2, 1982 hearing convened by the Court without prior notice of the matters to be heard, Judge Edelstein revealed his belief that Assistant Attorney General Baxter may have had a conflict of interest due to his prior role as a consultant to IBM during its defense of an earlier private antitrust suit filed by Memorex Corporation – thus calling into question the validity of the Government’s stipulation with IBM to dismiss the 1969 case. The District Court thereby deftly transitioned from partial tribunal to full-blown advocate for the Government, with all the prosecutorial enthusiasm from Judge Edelstein’s days at the Justice Department on display.
And then the litigation really went off the rails. On March 19, 1982, the Court granted an individual by the name of Philip M. Stern leave to appear as amicus curiae with respect to two issues: 1) whether the Government’s stipulation for dismissal with IBM was ineffective for failure to comply with the Tunney Act (15 U.S.C. §16); and 2) whether the stipulation was otherwise ineffective due to Assistant Attorney General Baxter’s asserted conflict of interest. IBM was ordered to show cause why the stipulation should not be overturned on either ground. Notably, Mr. Stern had no prior connection to the 1969 case; he was merely a philanthropist and heir to the Sears, Roebuck & Company fortune with a personal interest in antitrust enforcement. See Business People; I.B.M. Case Challenger Cites Policy Concerns, The New York Times, March 22, 1982, https://www.nytimes.com/1982/03/22/business/business-people-ibm-case-challenger-cites-policy-concerns.html. Public Citizen Litigation Group, a self-described nonprofit organization with a “longstanding interest in the implementation and enforcement of the Tunney Act,” was soon thereafter also granted amicus curiae status. Rather than simply accept the parties’ stipulation and allow the case to be dismissed, therefore, Judge Edelstein instead found some new litigants willing to continue the fray against IBM.
The corporation was, as a result, once again required to seek the District Court’s recusal in response to its continuing exercise of jurisdiction despite the parties’ stipulation for dismissal. This was summarily denied a mere two days after it was filed, a result IBM surely anticipated since it immediately petitioned the Second Circuit for a writ of mandamus to require Judge Edelstein to cease all further proceedings in the 1969 case. After ordering expedited briefing from the corporation as well as from Judge Edelstein himself, the Court of Appeals (notably, from which former Second Circuit Judge Mulligan had resigned more than a year earlier) quickly disposed of any suggestion that the dismissal stipulation was ineffective due to a conflict of interest. Relying upon the results of an internal investigation performed by the Justice Department’s Office of Professional Responsibility which found no conflict, the Circuit Court easily concluded that no basis to disqualify Assistant Attorney General Baxter existed. It therefore determined “that there is not even colorable jurisdiction in the District Court to pursue any inquiry concerning the merits of the conflict of interest claim” and ordered Judge Edelstein to “cease any further inquiry with respect to the conflict of interest claim.”
The Second Circuit then turned its attention to the claim, adopted by both the Trial Court and its amici, that the dismissal stipulation was ineffective for failure to comply with the Tunney Act. The Court of Appeals similarly concluded that this claim was baseless after carefully examining the relevant legislative history illustrating the Act’s inapplicability to stipulations for dismissal. In fact, the provisions of the Tunney Act are perfectly clear: they expressly pertain only to consent decrees entered by the presiding court in an antitrust suit, and omit any mention of the Act’s applicability to stipulations for dismissal. See 15 U.S.C. § 16(b), referencing “(a)ny proposal for a consent judgment submitted by the United States for entry in any civil proceeding brought by or on behalf of the United States under the antitrust laws” (emphasis added). The Circuit Court accordingly opined that “we are powerless to amend an Act of Congress to provide what litigants desire; we may only order enforced what an Act lawfully provides. And absent some indication that Congress intended the Tunney Act to apply to dismissals, we must conclude that it does not apply.”
Having decisively rejected both legal grounds offered in favor of the Trial Court’s continuing jurisdiction, the Second Circuit next concluded that Judge Edelstein inappropriately usurped power and abused his discretion so as to justify mandamus relief. In no uncertain terms, and without Judge Mulligan’s friendly influence, the Circuit Court firmly condemned Judge Edelstein’s obstinate refusal to accept the stipulation for dismissal. Recognizing that a trial court’s power to determine jurisdictional questions “is not limitless”, the Court of Appeals disapproved the “substantial amount of time” taken by Judge Edelstein to resolve issues that were “clear-cut”. Particularly in view of his refusal to vacate the document preservation orders requiring the retention of so many documents that IBM had then incurred $2 million in storage costs, the Second Circuit observed that Judge Edelstein “has abused his power by continuing a lawsuit which the parties have sought eagerly to dismiss.”
The Court of Appeals ultimately ordered “that a writ of mandamus shall issue to the Honorable David N. Edelstein, directing him (1) to cease his consideration of whether the parties must comply with the Tunney Act before their stipulation of dismissal may become effective; and (2) to dispose promptly of any matters presented by the parties necessary to effectuate the conclusion of this litigation, especially with respect to the needless storage of documents.”
And so the 1969 case was finally concluded, in a manner aptly characterized by at least one commentator as “fittingly grotesque.” See The Antitrust Fraud, Reason, October, 1982, https://reason.com/1982/10/01/the-antitrust-fraud/. “Grotesque” is an apt characterization for the entire case, really. It should seem obvious to any practitioner that judges are not supposed to penalize (much less antagonize, torment or intentionally inflict gratuitous punishment upon) litigants or their attorneys merely because of personal bias or prejudice.
Yet, that is precisely what occurred in the 1969 case on a scale so massive as to be breathtaking. Anyone in doubt of the foregoing need only to look to the manner in which Judge Edelstein’s oversight of the 1952 case was similarly concluded, see In re International Business Machines Corporation, 45 F.3d 641 (2d Cir.1995) (full text of the opinion here); he was once again ordered by the Second Circuit to recuse himself precisely because of how he had abused his discretion in the 1969 case, without any need for IBM to demonstrate new evidence of bias. It was as if the Court of Appeals by that point had zero tolerance for the Trial Court’s unmistakable partiality against IBM.
Surely Judge Edelstein knew that he was professionally and ethically bound to adjudicate impartially. Similar to the attorney-client privilege, the expectation of a fair and impartial tribunal is inseparable from the American judicial system and the English common law upon which it is based. Judge Edelstein was of course aware of this elementary obligation but nevertheless felt comfortable enough to discard it. As a former federal prosecutor, he was indeed the proverbial fox guarding IBM’s hen house.
It is therefore somewhat baffling as to why he remained a United States District Court Judge notwithstanding such a clear dereliction of the standards required by his esteemed office. If, as the Second Circuit determined in its above-cited 1995 opinion, Judge Edelstein’s misconduct in the 1969 case was per se sufficient to disqualify him from the 1952 case, why wasn’t he removed from office in 1982 immediately upon his earlier recusal? If a concern as powerful and venerable as IBM was not immune to the Court’s prejudice, wouldn’t any other litigant appearing in Judge Edelstein’s courtroom be similarly vulnerable to his caprice?
The 1969 case, along with the other cases examined (and to be examined) in this section, is illustrative of an institutional problem which transcends any individual judge. Human nature is predictable, and the idea that a judge would allow personal feelings to cloud the court’s impartiality is plausible. That some judges are unwilling (or unable) to set aside their prejudices within the context of performing their official duties demands that the judicial system be overhauled to account for this potential. In other words, better recourse must be afforded litigants to avoid the type of unfair and unconstitutional treatment suffered by IBM in the 1969 case.
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