Mandamus Relief

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7^th Circuit Court of Appeals

Case Name: Commodity Futures Trading Commission v. Kraft Foods, Inc., et al.

Case No.: 19-2769

Officials: EASTERBROOK, RIPPLE, and SYKES, Circuit Judges.

Focus: Mandamus Relief

In 2015 the Commodity Futures Trading Commission filed a civil action against Kraft Foods Group and Mondelēz Global. It was settled in August 2019, and the parties’ bargain, which the judge entered as a consent decree, includes this provision: Neither party shall make any public statement about this case other than to refer to the terms of this settlement agreement or public documents filed in this case, except any party may take any lawful position in any legal proceedings, testimony or by court order. Shortly after the district court entered its order, the Commission issued a press release announcing the suit’s resolution. Two Commissioners (Dan Berkovib and Rostin Behnam) filed statements explaining why they voted in favor of accepting this settlement.

Kraft and Mondelēz asked the district judge to hold the Commission and Commissioners in contempt of court for issuing the press release and concurring statements. The district judge set the motion for a hearing and directed Chairman Heath Tarbert, Commissioners Berkovib and Behnam, the Commission’s Director of Enforcement, and several of the Commission’s other employees to appear in court and testify under oath. The judge stated that he would administer Miranda warnings to these witnesses in preparation for a finding of criminal contempt and would demand that the witnesses explain the thinking behind the press release and the separate statements. Chairman Tarbert and the Commissioners protested. After a motion asking the district court to lift the demand for their presence and the threat of criminal sanctions went unaddressed for approximately two weeks, and the date scheduled for the hearing approached, the Commission filed a petition for a writ of mandamus. A motions panel issued a stay pending further order of this court.

We also ordered all of the papers to be placed in the public record. The district judge had directed the parties not to say anything in public about the upcoming hearing and to keep all of their legal filings secret, an order that is inconsistent with the law of this circuit. See, e.g., Union Oil Co. v. Leavell, 220 F.3d 562, 567–68 (7th Cir. 2000); Herrnreiter v. Chicago Housing Authority, 281 F.3d 634, 636–37 (7th Cir. 2002). Those two decisions hold that a confidentiality clause in the litigants’ agreement does not authorize secret adjudication.

We ordered Kraft and Mondelēz to respond to the petition and invited the district judge to do so. See Fed. R. App. P. 21(b)(1), (4). The district judge’s response states, among other things, that he no longer contemplates the possibility of criminal contempt, so that aspect of the controversy has dropped out. Everything we say from now on concerns civil contempt only. Chairman Tarbert and Commissioners Berkovib and Behnam have moved for leave to intervene. We grant that motion. Although the Commission is representing their interests adequately for the present, the threat of being personally penalized for contempt of court entitles them to be litigants in their own right, so that they may take such steps as they deem wise to protect their personal interests. Mandamus is a drastic remedy, reserved for urgent needs, but, for all that, it remains available to a litigant who can establish a clear right to relief and lacks any other way to protect his or her rights. See, e.g., Cheney v. United States District Court, 542 U.S. 367 (2004); Ex parte Fahey, 332 U.S. 258 (1947). The district court’s order directing the Chairman and two members of the Commission, plus members of the staff, to appear for questioning in open court cannot be reviewed on appeal from a final decision. The time taken away from their official duties will be lost forever.

Because the propriety of the Commission’s official deeds depends on those deeds, plus the administrative record (if any), there is neither need nor justification for testimony by the Chairman, any Commissioners, or any members of the agency’s staff. We issue a writ of mandamus and direct the district court to withdraw its demand that these persons appear in court for questioning. We also direct the district court to desist from any effort to hold the Chairman, Commissioners, and staff members personally in contempt of court, or otherwise to look behind the Commission’s public statements and the administrative record.

The argument for mandamus on this subject is weak. If the district judge ultimately concludes that the Commission is indeed in contempt, its arguments can be vindicated by an appeal in the regular course. We therefore deny the request for mandamus on this issue. Likewise we deny the Commission’s request that we transfer the district court’s proceedings to a different judge. The judge who entered the consent decree is in the best position to decide, as an initial matter, whether its provisions have been violated. The final decision will be subject to plenary review. The motion to intervene is granted. The petition for mandamus is granted to the extent we indicated above and otherwise denied.

Denied in part. Granted in in part.

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.