In Re Grand Jury Proceeding

18-3485
In re Grand Jury Proceeding
United States Court of Appeals
For the Second Circuit
August Term 2019
Argued: August 26, 2019
Decided: June 3, 2020
No. 18-3485
IN RE: GRAND JURY PROCEEDING
FREDERICK MARTIN OBERLANDER,
Respondent-Appellant,
RICHARD E. LERNER,
Respondent,
v.
UNITED STATES OF AMERICA,
Movant-Appellee.
Appeal from the United States District Court
for the Eastern District of New York
No. 17-mc-2242, LaShann DeArcy Hall, Judge.
Before: WINTER, POOLER, AND SULLIVAN, Circuit Judges.
Respondent-Appellant Frederick Oberlander challenges orders issued by
the district court (LaShann DeArcy Hall, J.) denying his motion to quash various
grand jury subpoenas and directing him to comply with the subpoenas on pain of
coercive monetary sanctions. Oberlander argues that the district court lacked
jurisdiction to enforce those subpoenas because they were either issued by the
government without a sitting grand jury or were enforced only after the issuing
grand jury had expired. In addition, Oberlander argues that the subpoenas were
overbroad, issued for an improper purpose, and infringed upon his First and Fifth
Amendment rights. We hold that (1) the district court lacked jurisdiction to
enforce a subpoena issued without a sitting grand jury; (2) the district court
retained jurisdiction to oversee a subpoena involving the same subject matter that
was subsequently issued by a newly impaneled grand jury; and (3) the district
court ceased to have jurisdiction to enforce the validly issued subpoena after the
issuing grand jury’s term expired. Nevertheless, because yet another grand jury
has been impaneled and has issued an identical subpoena, we have jurisdiction to
reach the merits of Oberlander’s motion to quash the subpoena and find that the
subpoena was neither overbroad nor issued with an improper purpose, and that
it did not infringe upon Oberlander’s First or Fifth Amendment rights.
VACATED IN PART; AFFIRMED IN PART AND REMANDED.
FREDERICK M. OBERLANDER, ESQ., pro se, Montauk,
New York.
RICHARD D. BELLISS (Stephen C. Green, on the brief)
Assistant United States Attorneys, for Grant C.
Jaquith, United States Attorney for the Northern
District of New York, Albany, New York, for
Movant-Appellee United States of America.
RICHARD J. SULLIVAN, Circuit Judge:
Respondent-Appellant Frederick Oberlander challenges orders issued by
the district court (LaShann DeArcy Hall, Judge) denying his motion to quash
2
various grand jury subpoenas and directing him to comply with the subpoenas on
pain of coercive monetary sanctions. Oberlander argues that the district court
lacked jurisdiction to enforce those subpoenas because they were either issued by
the government without a sitting grand jury or were enforced only after the
issuing grand jury had expired. In addition, Oberlander argues that the subpoenas
were overbroad, issued for an improper purpose, and infringed upon his First and
Fifth Amendment rights.
We VACATE IN PART, AFFIRM IN PART, and REMAND, holding that
(1) the district court lacked jurisdiction to enforce a subpoena issued without a
sitting grand jury; (2) the district court retained jurisdiction to oversee a subpoena
involving the same subject matter that was subsequently issued by a newly
impaneled grand jury; and (3) the district court ceased to have jurisdiction to
enforce the validly issued subpoena after the issuing grand jury’s term expired.
Nevertheless, because yet another grand jury has been impaneled and has issued
an identical subpoena, we have jurisdiction to reach the merits of Oberlander’s
motion to quash and find that the subpoena was neither overbroad nor issued with
an improper purpose, and that it did not infringe upon Oberlander’s First or Fifth
Amendment rights.
3
I. Background
A. Prior Proceedings
In 1998, Felix Sater pleaded guilty to participating in a “pump and dump”
securities fraud scheme as a part of a racketeering enterprise involving the La Cosa
Nostra organized crime families. Estate of Gottdiener v. Sater, 35 F. Supp. 3d 386,
391 (S.D.N.Y. 2014); see also Information at 10, United States v. Sater, No. 98-cr-1101
(ILG) (E.D.N.Y. Dec. 10, 1998), ECF No. 6. Over the next decade, he secretly
cooperated with the government in an undercover capacity, providing “valuable
foreign intelligence as well as information concerning some of the most elusive
and dangerous criminals of interest to U.S. law enforcement.” United States v.
Sater, No. 98-cr-1101 (ILG), 2019 WL 3288389, at *1 (E.D.N.Y. July 22, 2019).
Although Sater’s criminal proceedings were finally terminated when he was
sentenced in 2009, the fact of his cooperation remained sealed until it was
inadvertently disclosed by the Office of the Clerk of Court in August 2012. See In
re Applications to Unseal 98 CR 1101(ILG), 568 F. App’x 68, 69 (2d Cir. 2014); see also
Sater, 2019 WL 3288389, at *1 (discussing Sater’s cooperation as a matter of public
record).
4
Between 2010 and 2013, on the heels of Sater’s sentencing, Oberlander filed
a series of lawsuits seeking compensation on behalf of clients who alleged that
Sater had defrauded them. See Notice of Removal, Kriss v. BayRock Grp. LLC,
No. 13-cv-3905 (LGS) (S.D.N.Y. June 7, 2013), ECF No. 1; Complaint, Estate of
Gottdiener v. Sater, No. 13-cv-01824 (LGS) (S.D.N.Y. March 18, 2013), ECF No. 1;
Complaint, Kriss v. BayRock Grp. LLC, No. 10-cv-3959 (LGS) (S.D.N.Y. May 10,
2010), ECF No. 1. As part of those lawsuits, Oberlander sought to publicly disclose
information about Sater’s cooperation with the government, even going so far as
to attach sealed materials to the complaints as exhibits. See Roe v. United States, 428
F. App’x 60, 63–64 (2d Cir. 2011). Ultimately, this Court enjoined Oberlander from
publicly disclosing any sealed information and directed the Chief Judge of the
Eastern District of New York to appoint a special master to oversee compliance
with the relevant sealing orders. Roe v. United States, 414 F. App’x 327, 329 (2d Cir.
2011); see also In re Applications to Unseal 98 CR 1101(ILG), 568 F. App’x at 70
(affirming sealing orders); Roe, 428 F. App’x at 68 (affirming injunction).
In August 2012, Sater commenced a civil contempt proceeding against
Oberlander, alleging that Oberlander had intentionally violated this Court’s
disclosure injunction. See Motion, In re Motion for Civil Contempt by John Doe,
5
No. 12-mc-557 (PKC) (E.D.N.Y. Aug. 22, 2012), ECF No. 1. In March 2015, Judge
Cogan, then serving as special master, issued an order directing Oberlander to
show cause as to why he had not violated the sealing orders and this Court’s
orders by repeatedly disclosing sealed documents and other information between
February 2011 and January 2015. See id., ECF No. 97. Four months later, Judge
Cogan referred the matter to the United States Attorney for the Eastern District of
New York for a criminal investigation. See id., ECF. No. 117. The United States
Attorney’s Office for the Eastern District of New York subsequently recused itself
and referred the investigation to the United States Attorney for the Northern
District of New York.
B. Grand Jury and District Court Proceedings
In April 2016, following Judge Cogan’s referral, a grand jury was impaneled
in the Eastern District of New York (the “First Grand Jury”) to investigate
Oberlander’s conduct with respect to the sealing orders. Two months later, in
June 2016, the First Grand Jury issued the first of at least four subpoenas
requesting documents from Oberlander relating to his communications with
reporters. Oberlander refused to comply with the subpoena, and the First Grand
Jury’s term expired on December 14, 2016.
6
Nevertheless, over four months later, the government, apparently unaware
that the First Grand Jury had expired, served Oberlander with another grand jury
subpoena (the “April 2017 Subpoena”) in connection with the same investigation.
This subpoena, dated April 3, 2017, was directed to the custodian of records for
Oberlander’s law firm and requested the same records as the first subpoena, as
well as the custodian’s testimony. Neither Oberlander nor a different records
custodian appeared to give testimony, and no records were produced.
Meanwhile, on April 19, 2017, a new grand jury was impaneled (the “Second
Grand Jury”) to investigate the same conduct: Oberlander’s mishandling of sealed
documents and his violation of court-issued sealing orders.
In August 2017, the government filed a motion to compel Oberlander to
comply with the April 2017 Subpoena. The district court granted the motion a
week later. After eight months and at least nine extensions of time, Oberlander
filed a pro se motion to quash the subpoena on May 7, 2018.
On June 6, 2018, the district court denied Oberlander’s motion to quash but
directed the government to reissue the April 2017 Subpoena with minor
amendments not relevant here. The court further ordered Oberlander to produce
the documents demanded by the soon-to-be-reissued subpoena within a month
7
and warned that failure to comply would “result in sanctions, including the
imposition of coercive fines or imprisonment pending compliance.” Gov’t App’x
at 133.
On June 12, 2018, in accordance with the district court’s direction, the
Second Grand Jury issued a revised subpoena (the “June 2018 Subpoena”), which,
like the prior two subpoenas, sought records of communications between
Oberlander and eight news reporters “involving any matters about Felix Sater”
and others occurring between January 11, 2011 and February 1, 2015. Gov’t App’x
at 136. The June 2018 Subpoena also required the custodian of records to testify
before the Second Grand Jury.
On June 22, 2018, Oberlander filed a motion for reconsideration of his
motion to quash the April 2017 Subpoena and to stay enforcement of the district
court’s June 6 order, which the district court denied on June 27, 2018. 1 In so doing,
the district court again warned Oberlander that his continued failure to produce
responsive documents would result in coercive sanctions.
1Though Oberlander did not formally style this as a motion to quash the June 2018 Subpoena,
that was its practical effect. The June 2018 Subpoena was substantively identical to the April 2017
Subpoena, and a decision to quash the April 2017 Subpoena would apply with equal force to the
June 2018 Subpoena. Moreover, as the June 2018 Subpoena was then the operative subpoena in
the investigation, Oberlander had no need to quash the old April 2017 Subpoena.
8
On July 3, 2018, one day before the production deadline set by the district
court’s June 6 order, Oberlander produced responsive records for the period
beginning on January 9, 2013 – the date on which Oberlander had incorporated his
law practice – and continuing through the June 2018 Subpoena’s end date.
Oberlander subsequently submitted to the district court additional records
covering the period from the subpoena’s start date to January 8, 2013 – a period in
which Oberlander operated his law firm as an unincorporated sole proprietorship.
Relying on that fact, Oberlander, ostensibly moving to quash the June 2018
Subpoena, requested that the court review those records in camera to determine
whether they constituted personal records protected by the Fifth Amendment’s
“act of production” privilege – an argument that he had already raised,
unsuccessfully, in his motion to quash the April 2017 Subpoena. Predictably, on
September 25, 2018, the district court, treating Oberlander’s request as “an
additional baseless motion for reconsideration,” determined that the records were
not protected by the Fifth Amendment and ordered Oberlander to produce them
“to the government” within six days. Gov’t App’x at 144, 146.
Despite this order, Oberlander still had not produced the withheld
documents by October 17, 2018 – the date on which the Second Grand Jury, which
9
issued the June 2018 Subpoena, expired. Five days later, without an impaneled
grand jury, the government filed a motion to compel Oberlander to produce all
withheld documents as required by the district court’s orders and the June 2018
Subpoena. On October 23, 2018, the district court ordered Oberlander to produce
any remaining responsive documents by October 31, 2018 or be subject to civil
contempt sanctions in the form of a $1,000 daily fine until he complied. After
Oberlander claimed that he received late notice of that order, the district court
issued yet another order, dated November 8, 2018, that temporarily stayed the
October 23 order and directed Oberlander to produce the subpoenaed documents
within seven days of receiving the court’s November 8 order, again with a $1,000
daily fine to follow for noncompliance thereafter. As before, the deadline imposed
by the district court came and went without Oberlander producing any
documents. 2
On November 16, 2018, Oberlander timely appealed from the district court’s
November 8, 2018 order. Doc. No. 1. He also challenges the district court’s
(i) June 6, 2018 order denying his motion to quash the April 2017 Subpoena;
2On November 29, 2018, a newly impaneled grand jury, which was still sitting as of February 19,
2019, issued a new subpoena to Oberlander. The new subpoena is identical in all material respects
to the June 2018 Subpoena. Though the government moved to compel Oberlander to comply
with this new subpoena, the district court has not yet ruled on that motion.
10
(ii) June 27, 2018 and September 25, 2018 orders denying his motions for
reconsideration of his motion to quash; and (iii) October 23, 2018 order directing
compliance with the June 2018 Subpoena on pain of coercive monetary sanctions.
This Court granted Oberlander’s motion for a stay of monetary sanctions pending
appeal. Doc. No. 34.
II. Appellate Jurisdiction and Standard of Review
We have jurisdiction over the district court’s November 8, 2018 final order
imposing contempt sanctions, and the orders preceding it, under 28 U.S.C. § 1291.
See In re Air Crash at Belle Harbor, 490 F.3d 99, 104–05 (2d Cir. 2007); Anobile v.
Pelligrino, 303 F.3d 107, 115 (2d Cir. 2002) (“Generally, . . . this Court interprets an
appeal from a specific order disposing of the case as an appeal from the final
judgment, which incorporates all previous interlocutory judgments in that case
and permits their review on appeal.”). Insofar as Oberlander challenges our
jurisdiction and that of the district court, we may consider those issues as well. See
Kuhali v. Reno, 266 F.3d 93, 100 (2d Cir. 2001) (acknowledging that all Article III
courts possess the “inherent jurisdiction . . . to determine their jurisdiction”).
“The standard of review for determinations regarding subject-matter
jurisdiction is clear error for factual findings, and de novo for the legal conclusion
11
as to whether subject[-]matter jurisdiction exists.” Cohen v. Postal Holdings, LLC,
873 F.3d 394, 398 (2d Cir. 2017) (quoting Lyndonville Sav. Bank & Tr. Co. v. Lussier,
211 F.3d 697, 701 (2d Cir. 2000)).
III. Discussion
Oberlander challenges the district court’s sanctions orders and its refusal to
quash the subpoenas on various grounds. He argues that the district court:
(1) ceased to have subject-matter jurisdiction over the case once the government
served the April 2017 Subpoena without a sitting grand jury; (2) lacked the power
to issue coercive sanctions to enforce compliance with the April 2017 and June 2018
Subpoenas because the issuing grand juries had expired by the time the sanctions
orders had issued; and (3) erred in not quashing the April 2017 and June 2018
Subpoenas on the grounds that they were overbroad and issued in bad faith,
unduly burdened his First Amendment rights, and compelled him to produce
certain documents in violation of his Fifth Amendment “act of production”
privilege. We address each of these issues in turn.
A. Validity of April 2017 Subpoena and Jurisdiction Over Later
Proceedings
Oberlander argues that the district court lacked jurisdiction over all
proceedings relating to the April 2017 and June 2018 Subpoenas because the
12
April 2017 Subpoena – which was issued without a sitting grand jury – was “never
more than a scrap of paper.” Oberlander’s Br. at 30. We therefore must determine
whether the April 2017 Subpoena was invalid when issued and, if so, whether that
fact somehow stripped the district court of jurisdiction to consider any subsequent
subpoenas issued by later grand juries containing the same information requests
or involving the same underlying conduct.
On the first point, we agree with Oberlander. The April 2017 Subpoena was
invalid because it was served by the government in the name of an expired grand
jury. That the Second Grand Jury was subsequently impaneled before the
subpoena’s April 19 return date does not alter this conclusion.
It is well settled that more than one grand jury may investigate the same
matter. See United States v. Thompson, 251 U.S. 407, 413–15 (1920); see also United
States v. Halper, 590 F.2d 422, 433 n.16 (2d Cir. 1978). Nevertheless, each grand
jury’s investigation is “separate and independent” from its predecessor’s, since an
investigation “terminates with the grand jury [that] undertakes it.” Loubriel v.
United States, 9 F.2d 807, 809 (2d Cir. 1926) (Learned Hand, J.). 3 On that basis, a
3 That Loubriel is nearly a century old is neither here nor there; it may be old, but it is “old
precedent, and we are bound to follow [it].” See Vasquez v. GMD Shipyard Corp., 582 F.3d 293, 299
(2d Cir. 2009) (internal quotation marks omitted) (treating as binding opinions issued in 1903 and
1909).
13
subpoena, which is merely an investigative tool, also terminates with the
investigating grand jury that issued it. More to the point, the duty imposed by a
subpoena to produce documents to, or to testify before, a specific grand jury ceases
once that grand jury’s term expires. See id. (“When that [grand jury] adjourned,
Loubriel was under no further duty to testify [pursuant to the subpoena] . . . .”).
We have never wavered from this long-standing precedent, and at least one other
circuit has agreed that each new grand jury must issue its own subpoena. See In
re Grand Jury Proceedings (“NITHPO”), 744 F.3d 211, 217–18 (1st Cir. 2014)
(reasoning that to hold otherwise “would render the grand jury subpoena process
all but meaningless” and noting that there is “no great administrative difficulty in
requiring, as a precondition to the use of coercive contempt power, the issuance of
a new subpoena for each new grand jury”). 4
Accordingly, the April 2017 Subpoena was invalid from its inception. The
subpoena was labeled “4/4/2016[],” the date on which the First Grand Jury was
4 We note, however, that two other circuits have held to the contrary. See In re Sealed Case, 223
F.3d 775, 778 (D.C. Cir. 2000) (“Appellant has identified no prejudice arising from enforcement of
a subpoena where the originally issuing grand jury has expired and another has indisputably
carried the investigation forward.”); In re Grand Jury Proceedings, 658 F.2d 782, 783–84 (10th
Cir. 1981) (reasoning that “to hold that a second subpoena is required would simply result in a
complete waste of judicial time” and limiting the holding in Loubriel to subpoenas calling for
testimony before a grand jury). Nevertheless, we find the analysis provided by Loubriel and
NITHPO to be more compelling.
14
impaneled, reflecting that the subpoena concerned the First Grand Jury’s
investigation. Gov’t App’x at 15–17. But by April 2017, when the subpoena was
issued, the grand jury – and its investigation – had long since terminated. The
subpoena was therefore a nullity, since it required Oberlander to produce
documents to and appear before a grand jury that was no longer impaneled, in
connection with an investigation that had expired in December 2016. Compliance
with such a subpoena was obviously impossible, Loubriel, 9 F.2d at 809, and the
district court lacked the power to compel the impossible through coercive
sanctions.
But that finding does not end our inquiry. Even though the April 2017
Subpoena was invalid when issued, the district court could clearly enforce the June
2018 Subpoena, which was properly issued by the then-impaneled Second Grand
Jury. See 28 U.S.C. § 1826(a) (granting district courts the authority to sanction a
recalcitrant witness “in any proceeding before or ancillary to any . . . grand jury”);
In re Doe, 860 F.2d 40, 49 (2d Cir. 1988) (explaining that district courts have
“inherent supervisory power” to enforce grand jury subpoenas); cf. Cosme v. IRS,
708 F. Supp. 45, 47 (E.D.N.Y. 1989) (holding that the district court had jurisdiction
over a summons even though it lacked jurisdiction over two related summonses,
15
which were issued to entities outside of the district). We are aware of no authority
suggesting that the issuance of an invalid subpoena automatically strips the court
of subject-matter jurisdiction to enforce subsequent subpoenas issued by a
properly impaneled and still-sitting grand jury investigating the same alleged
misconduct. To the contrary, in other contexts, we have recognized that even “if
a jurisdictional defect exists at some time prior to a district court’s entry of
judgment, the court’s judgment is still valid if the jurisdictional defect is cured
before final judgment is entered.” Brown v. Eli Lilly & Co., 654 F.3d 347, 356 (2d
Cir. 2011); see also Hallingby v. Hallingby, 574 F.3d 51, 56 (2d Cir. 2009) (“[T]he
critical issue [is] whether the district court had subject matter jurisdiction at any
time before it rendered judgment.” (quoting Briarpatch Ltd. v. Phoenix Pictures, Inc.,
373 F.3d 296, 301 (2d Cir. 2004)). We therefore have little trouble concluding that
the district court had authority to enforce the June 2018 Subpoena while the
Second Grand Jury, which issued it, was still impaneled.
B. Power to Issue Coercive Sanctions to Compel Compliance with a
Subpoena After the Issuing Grand Jury Has Expired
Oberlander next argues that even if the June 2018 Subpoena was validly
issued, the district court’s October 23, 2018 and November 8, 2018 sanctions orders
were invalid because they were issued after the Second Grand Jury had already
16
expired. Because “the law does not compel the impossible,” NITHPO, 744 F.3d
at 212, we agree.
As an initial matter, the district court had jurisdiction to enforce the
June 2018 Subpoena when it issued its June 27, 2018 and September 25, 2018
orders. At that time, the subpoena, having been validly issued by a still-sitting
grand jury, was enforceable. And had the district court issued coercive sanctions
at that time – or at any point before the Second Grand Jury expired on October 17,
2018 – we would have no hesitation in upholding that order. But it did not. The
district court instead waited until after the Second Grand Jury’s term expired to
finally hold Oberlander in contempt.
Once the issuing grand jury expired, Oberlander’s duty to comply with the
June 2018 Subpoena ceased. See Loubriel, 9 F.2d at 809. And, as we previously held
in Loubriel, Oberlander cannot be “compelled to discharge a duty which ha[s]
ended.” Id. To hold otherwise would place Oberlander in the untenable position
of being subject to civil sanctions without the ability to purge himself of contempt.
See Shillitani v. United States, 384 U.S. 364, 371 (1966) (“Where the grand jury has
been finally discharged, a contumacious witness can no longer be confined since
he then has no further opportunity to purge himself of contempt.”).
17
The government attempts to sidestep this logic, arguing that Oberlander can
still purge himself of contempt because (i) the district court ordered Oberlander to
produce documents directly to the government, not the grand jury and (ii) a
successor grand jury has since been impaneled to continue the investigation. We
disagree.
First, the government does not identify any authority for the district court’s
orders except the expired June 2018 Subpoena. And, as we held in Loubriel, any
order to produce evidence pursuant to an expired grand jury’s subpoena is “void.”
9 F.2d at 809; see also United States v. First Nat’l City Bank, 396 F.2d 897, 900 n.9 (2d
Cir. 1968) (“[T]he punishment [of civil contempt] c[annot] extend beyond the
expiration of the life of the Grand Jury.”). The fact that the district court ordered
Oberlander to produce the documents to the government directly is of no moment,
since the government is not authorized to stand in the shoes of the grand jury. To
hold otherwise would effectively overturn Loubriel and, more importantly, reduce
the grand jury to a quaint fiction. Cf. Branzburg v. Hayes, 408 U.S. 665, 687 (1972)
(“Grand jury proceedings are constitutionally mandated for the institution of
federal criminal prosecutions for capital or other serious crimes, and its
constitutional prerogatives are rooted in long centuries of Anglo-American
18
history.” (internal quotation marks omitted)); id. at 690 (“[T]he grand jury plays
an important, constitutionally mandated role . . . .”); Trump v. Vance, 941 F.3d 631,
643–44 (2d Cir. 2019) (“[T]he grand jury has a central role in our system of
federalism . . . [and] [w]e are thus hesitant to interfere with the ancient role of the
grand jury.” (internal quotation marks omitted)).
Second, as discussed above, a grand jury cannot merely pick up an
investigation from where its predecessor left off. Loubriel, 9 F.2d at 809. Each is a
separate entity conducting its own investigation. Just as evidence and testimony
presented to one grand jury must be re-presented to a new grand jury, see, e.g., In
re Grand Jury Matter #3, 847 F.3d 157, 160 (3d Cir. 2017) (noting that evidence
presented to an initial grand jury was re-presented to a subsequent grand jury
before it issued a superseding indictment); see also United States v. Guillen, No. 17-
cr-512 (KMW), 2018 WL 5831318, at *7 (S.D.N.Y. Nov. 7, 2018) (same); United States
v. Allen, No. 09-cr-329 (RJA), 2014 WL 1745933, at *2 (W.D.N.Y. Apr. 30, 2014)
(same), so too must the new grand jury issue new investigative subpoenas to
obtain evidence previously sought by or submitted to an earlier grand jury.
To be sure, requiring each subsequent grand jury to issue nearly identical
subpoenas may result in more paperwork for the government. But, like the First
19
Circuit, “we see no great administrative difficulty in requiring, as a precondition
to the use of coercive contempt power, the issuance of a new subpoena for each
new grand jury.” NITHPO, 744 F.3d at 218. And it certainly will not require much
effort on the part of the government to stay abreast of the expiration dates of the
grand juries charged with investigating serious and potentially criminal conduct.
Indeed, federal law allows for grand jury terms to be extended up to 36 months
when “the district court determines [that] the business of the grand jury has not
been completed.” 18 U.S.C. § 3331(a); see also id. § 3333(e) (allowing extensions
beyond 36 months in certain circumstances).
Accordingly, the district court’s authority to enforce the June 2018 Subpoena
ceased when the issuing grand jury’s term expired on October 17, 2018. We
therefore vacate the district court’s October 23, 2018 and November 8, 2018
sanctions orders for lack of jurisdiction. 5
That is not to say that the district court stands powerless in the face of
Oberlander’s recalcitrance and repeated violations of court orders. On remand,
5 As we vacate the district court’s sanctions order, we do not reach Oberlander’s alternative
arguments that the sanctions were improper because he was not granted a hearing, that the record
did not demonstrate that the amount imposed was reasonable, or that he was denied his right to
counsel with respect to the sanctions order.
20
the district court is certainly free to consider whether to initiate criminal contempt
proceedings against Oberlander. 6 See Fed. R. Crim. P. 42 (providing courts with
the power to initiate criminal contempt prosecutions); see also Fed. R. Crim. P. 17(g)
(“The court . . . may hold in contempt a witness who, without adequate excuse,
disobeys a subpoena issued by a federal court in that district.”). Whereas civil
contempt seeks to compel compliance with the court’s orders for the benefit of the
complainant, the purpose of criminal contempt “is punitive, to vindicate the
authority of the court.” In re Weiss, 703 F.2d 653, 661 (2d Cir. 1983) (quoting
Gompers v. Buck’s Stove & Range Co., 221 U.S. 418, 441 (1911)); see also 18 U.S.C. § 401
(providing that a court shall have the power to punish “contempt of its authority”).
As explained above, the district court here could not hold Oberlander in civil
contempt because he would be unable to purge himself of that contempt. But that
inability is irrelevant in a criminal contempt action, which is punitive in nature.
See In re Grand Jury Proceedings, 871 F.2d 156, 162 (1st Cir. 1989) (recognizing that
“the court always has available the sanction of criminal contempt” where a witness
6 The one-year statute of limitations prescribed by 18 U.S.C. § 3285 applies only to contempt
proceedings “within [18 U.S.C. §] 402.” Because Oberlander’s contempt “was committed in
disobedience of a court order entered in an action prosecuted on behalf of the United States,”
§ 402 is inapplicable. See United States v. Woodard, 675 F.3d 1147, 1150–51 (8th Cir. 2012)
(alterations omitted) (quoting United States v. Miller, 588 F.2d 1256, 1262 (9th Cir. 1978)).
21
has not complied with an expired grand jury’s subpoena); cf. Shillitani, 384 U.S. at
371 (“Having sought to deal only with civil contempt, the District Courts lacked
authority to imprison petitioners for a period longer than the term of the grand
jury.” (emphasis added)).
C. Motion to Quash
Our decision that the June 2018 Subpoena is now unenforceable does not
render Oberlander’s motion to quash moot. We have jurisdiction to review the
issues raised in that motion because this dispute is “capable of repetition, yet
evading review.” United States. v. Juvenile Male, 564 U.S. 932, 938 (2011) (internal
quotation marks omitted).
This exception to the mootness doctrine applies “where (1) the challenged
action is in its duration too short to be fully litigated prior to cessation or
expiration, and (2) there is a reasonable expectation that the same complaining
party will be subject to the same action again.” Id. (internal quotation marks and
alterations omitted). Both requirements are met here. As the history of this
dispute demonstrates, the relatively short duration of the grand jury has made it
practically impossible to fully litigate Oberlander’s challenges to the subpoena.
See In re Grand Jury Subpoena Served Upon Doe, 781 F.2d 238, 243 (2d Cir. 1986) (en
22
banc) (“Grand jury investigations must proceed expeditiously. The length of time
required for appellate review [of a motion to quash a subpoena] often is
protracted.”). Moreover, a successor grand jury has already initiated a similar
investigation and has issued a new subpoena seeking the same documents and
testimony as the June 2018 Subpoena. And, as noted above, even if that grand jury
has itself expired, the district court may well choose to institute criminal contempt
proceedings against Oberlander, which would no doubt raise similar issues
concerning the June 2018 Subpoena’s validity. It is therefore apparent that this
dispute is alive and well. See id. (holding that a motion to quash a grand jury
subpoena falls within the “capable of repetition yet evades review” exception to
mootness (internal quotation marks omitted)); see also NITHPO, 744 F.3d at 218–19
(holding that a challenge to a subpoena is not moot where a successor grand jury
is investigating the same conduct). Accordingly, there is no bar to our
consideration of Oberlander’s motion to quash on the merits.
Oberlander argues that the district court abused its discretion in denying his
motion to quash the June 2018 Subpoena because the subpoena (i) was overbroad
and issued in bad faith; (ii) improperly burdened his First Amendment rights; and
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(iii) called for the production of incriminating personal records in violation of the
Fifth Amendment. We disagree.
1. Overbreadth & Bad Faith
Oberlander’s contention that the June 2018 Subpoena was invalid because it
was overbroad and issued in bad faith fails for a number of reasons.
First, the district court did not abuse its discretion in finding that the
June 2018 Subpoena was reasonable in scope. Because the grand jury’s function
“is to inquire into all information that might possibly bear on its investigation until
it has identified an offense or has satisfied itself that none has occurred,” the grand
jury necessarily “paints with a broad brush.” United States v. R. Enters., Inc., 498
U.S. 292, 297 (1991). Thus, a grand jury subpoena is unreasonably broad only if
“there is no reasonable possibility that the category of materials the [g]overnment
seeks will produce information relevant to the general subject of the grand jury’s
investigation.” Id. at 301. Oberlander, as the party seeking to quash the subpoena,
bears the heavy burden of making that showing. In re Liberatore, 574 F.2d 78, 83
(2d Cir. 1978) (“[T]he party seeking to quash a subpoena must carry the burden of
showing that the information sought bears no conceivable relevancy to any
legitimate object of investigation by the federal grand jury.” (internal quotation
marks omitted)).
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Oberlander argues that he has met this burden because the subpoena
demanded the production of records for all communications between Oberlander
and eight reporters that in any way concerned the individuals and entities
associated with the litigations underlying the sealing orders. According to
Oberlander, the subpoena instead should have been limited to only those
communications concerning information subject to the sealing orders. But given
the “broad brush” with which grand juries paint, the subpoena was sufficiently
related to Judge Cogan’s criminal referral. See R. Enters., 498 U.S. at 297. This is
especially true in light of the grand jury’s authority to “investigate merely on
suspicion that the law is being violated, or even just because it wants assurance
that it is not.” United States v. Morton Salt Co., 338 U.S. 632, 642–43 (1950).
Second, the district court also reasonably concluded that the subpoena was
not issued in bad faith or otherwise used for an improper purpose. “A grand jury
subpoena is presumed to have a proper purpose,” and the party challenging the
subpoena “bears the burden of showing that the grand jury has exceeded its legal
powers.” United States v. Salameh, 152 F.3d 88, 109 (2d Cir. 1998) (citing R. Enters.,
498 US. at 300–01). To do so, that party “must present ‘particularized proof’ of an
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improper purpose to overcome the presumption of propriety of the grand jury
subpoena.” Id. (quoting United States v. Mechanik, 475 U.S. 66, 75 (1986)).
Oberlander’s arguments fall well short of that mark. Most of his allegations
predate the criminal referral and concern the conduct of the referring court, rather
than the government or the grand jury. For example, Oberlander suggests –
without any support – that Judge Cogan was biased against him. His remaining
allegations fare no better. For instance, Oberlander bemoans the length of the
investigation, but fails to explain why the investigation’s timeline was
unreasonable or how it offers “particularized proof” of bad faith. See Salameh, 152
F.3d at 109 (internal quotation marks omitted). Oberlander also suggests that the
government intentionally sought to enforce an invalid subpoena in initiating this
action, and then intentionally concealed that fact. But that claim is at best
speculative. And although Oberlander asserts that the conduct under
investigation did not violate valid court orders, even if true, that would not render
the investigation improper. See, e.g., United States v. Williams, 504 U.S. 36, 48 (1992)
(noting that a grand jury “need not identify the offender it suspects, or even the
precise nature of the offense it is investigating” (internal quotation marks
omitted)); R. Enters., 498 U.S. at 297.
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2. First Amendment Burdening
Oberlander next argues that the district court erred in finding that the
subpoenas did not burden his First Amendment rights, and that it should have
applied “a heightened scrutiny, compelling interest test” to the subpoena, because
it sought documents related to Oberlander’s communications with the press.
Oberlander’s Br. at 31. But a potential witness is not excused from compliance
with a grand jury subpoena merely because the subpoena concerns the witness’s
communications with reporters. See Branzburg, 408 U.S. at 695, 700. And this
Court previously rejected Oberlander’s First Amendment challenges to the
underlying sealing orders and injunctions. See, e.g., Roe, 428 F. App’x at 66–67.
Oberlander’s First Amendment arguments are thus meritless.
3. Fifth Amendment Act of Production Privilege
Lastly, Oberlander argues that the district court abused its discretion in
refusing to permit him to withhold certain documents on Fifth Amendment
grounds. In particular, Oberlander tells us that he is entitled to assert a Fifth
Amendment privilege with respect to all documents predating the January 2013
incorporation of his law firm. The district court concluded that those documents
were created in Oberlander’s professional capacity and were therefore ineligible
for protection under the Fifth Amendment. We agree with the district court’s
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ultimate conclusion, though we affirm on slightly different grounds. See Thyroff v.
Nationwide Mut. Ins. Co., 460 F.3d 400, 405 (2d Cir. 2006) (“[W]e are free to affirm a
decision on any grounds supported in the record, even if it is not one on which the
trial court relied.”).
The Fifth Amendment guarantees that no individual “shall be compelled in
any criminal case to be a witness against himself.” U.S. Const. amend. V; see also
Lefkowitz v. Turley, 414 U.S. 70, 77 (1973) (acknowledging that the Fifth
Amendment may be invoked outside of criminal proceedings). Although that
guarantee plainly applies to statements, its reach is not so limited – it applies to
any “compelled incriminating communications . . . that are ‘testimonial’ in
character.” United States v. Hubbell, 530 U.S. 27, 34 (2000). “Because the act of
producing documents can be both incriminating and testimonial . . . a subpoenaed
party may be able to resist production on Fifth Amendment grounds.” In re Grand
Jury Subpoena Issued June 18, 2009 (“ASC”), 593 F.3d 155, 157 (2d Cir. 2010); see also
Fisher v. United States, 425 U.S. 391, 410 (1976) (acknowledging that the Fifth
Amendment guarantees an act-of-production privilege).
It is well understood, however, that an individual may not assert a Fifth
Amendment privilege on behalf of a “collective entity” – i.e., “an[y] organization
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which is recognized as an independent entity apart from its individual members,”
such as a corporation or partnership. Bellis v. United States, 417 U.S. 85, 92 (1974);
see also Braswell v. United States, 487 U.S. 99, 104–10 (1988); ASC, 593 F.3d at 157–59.
This “collective entity” exception applies to any testimonial privilege under the
Fifth Amendment, including the act-of-production privilege. See Braswell, 487 U.S.
at 109–10 (“We cannot agree . . . that [Fisher] rendered the collective entity rule
obsolete.”). Thus, when a witness refuses to produce documents on Fifth
Amendment grounds, the court must distinguish between those documents that
are personal in nature, and therefore may be withheld, and those that are corporate
in nature, and therefore fall within the “collective entity” exception.
Although drawing this distinction is not always an easy task, we have
developed a non-exhaustive multi-factor balancing test under which district
courts are to consider:
[W]ho prepared the document, the nature of its contents,
its purpose or use, who maintained possession and who
had access to it, whether the corporation required its
preparation, and whether its existence was necessary to
the conduct of the corporation’s business.
Grand Jury Subpoena Duces Tecum Dated Apr. 23, 1981 Witness v. United States
(“Grand Jury Witness”), 657 F.2d 5, 8 (2d Cir. 1981).
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Here, Oberlander argues that the documents created when he was a sole
proprietor are personal in nature and thus do not fall within the “collective entity”
exception. Oberlander is correct to the extent that an unincorporated sole
proprietorship is not a “collective entity,” and its documents are therefore entitled
to Fifth Amendment protection. See United States v. Doe, 465 U.S. 605, 612–14 (1984)
(holding that the compelled production of a sole proprietorship’s records would
violate the Fifth Amendment); see also Braswell, 487 U.S. at 104 (“Had petitioner
conducted his business as a sole proprietorship, Doe would require that he be
provided the opportunity to show that his act of production would entail
testimonial self-incrimination.”). But simply because a document was not created
by a corporation does not mean that it cannot later become a corporate record.
Indeed, the identity of a document’s creator is merely one of many factors to be
considered in divining its nature. See Grand Jury Witness, 657 F.2d at 8.
Having applied the Grand Jury Witness test to the facts in the record before
us, we conclude that the documents targeted by the June 2018 Subpoena are
corporate in nature and thus exempt from the Fifth Amendment. The subpoena
was directed to the custodian of records for Oberlander’s corporate entity, thereby
reaching only records in the corporation’s possession. Moreover, the records were
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maintained for corporate purposes and necessary to the conduct of the
corporation’s business: they pertained to the representation of clients that began
pre-incorporation but continued post-incorporation. For example, Oberlander
represented Jody Kriss from at least 2010 through 2015. See Letter Motion, Kriss v.
BayRock Grp., LLC, 10-cv-3959 (LGS) (S.D.N.Y. Mar. 26, 2015), ECF No. 134. Thus,
any pre-incorporation records concerning Oberlander’s representation of Kriss
have now become necessary corporate documents. Accordingly, though these
records were created before Oberlander incorporated his law firm, they have since
become corporate in nature and are exempt from protection under the Fifth
Amendment.
IV. Conclusion
For the reasons stated above, we VACATE the district court’s October 23,
2018 and November 8, 2018 orders. We AFFIRM the district court’s June 27, 2018
and September 25, 2018 orders. We further REMAND to the district court for
proceedings consistent with this opinion.
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