In Re: Grand Jury

Opinions of the United
2002 Decisions States Court of Appeals
for the Third Circuit
1-10-2002
In Re: Grand Jury
Precedential or Non-Precedential:
Docket 1-2883
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Filed January 10, 2002
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
NO. 01-2883
IMPOUNDED
On Appeal From the United States District Court
For the District of New Jersey
(D.C. Miscellaneous No. 00-mc-00265)
District Judge: Honorable John C. Lifland
Argued November 9, 2001
BEFORE: McKEE, RENDELL and STAPLETON,
Circuit Judges
(Opinion Filed: January 10, 2002)
Lawrence S. Goldman (Argued)
Law Offices of Lawrence S. Goldman
500 Fifth Avenue
29th Floor
New York, NY 10110
Attorney for Appellant
John Doe 1
Elizabeth S. Ferguson (Argued)
Office of United States Attorney
970 Broad Street
Room 700
Newark, NJ 07102
Attorney for Appellee
United States of America
OPINION OF THE COURT
STAPLETON, Circuit Judge:
We are here asked to decide whether an Assistant United
States Attorney ("AUSA") may, without court approval,
disclose grand jury information to an AUSA in another
district for use in the performance of his duty to enforce
federal criminal law. We must also determine whether the
appellant, an attorney, is entitled to redact documents that
he must produce to the grand jury so as to preserve the
anonymity of his clients.
I.
The United States Attorney for the District of New Jersey
has been conducting a grand jury investigation, and
appellant has become a subject of that investigation.
According to the government, this investigation is not
limited to the District of New Jersey and has required the
coordinated effort and interaction of several United States
Attorneys and their assistants in other districts.
Appellant undertook representation of a client in federal
criminal proceedings pending in another district. The
United States Attorney's office in New Jersey, in the course
of its grand jury investigation, received information about
appellant which it reasonably believed revealed a conflict of
interest between appellant and his/her client. In two
letters, both of which appear to follow up on separate
telephone conversations, an AUSA from New Jersey
revealed this information to the AUSA having responsibility
for the prosecution against the client in the other district.
The AUSA receiving this information then filed a motion to
have appellant disqualified from representing the client on
the basis that the grand jury investigation and the
information it revealed demonstrated a conflict of interest.
The motion was denied and appellant represented the client
at trial and continues to represent the client on appeal.
After the client's conviction, a New Jersey grand jury
issued a subpoena duces tecum to appellant's accountants.
2
The subpoena requested documents relating to appellant,
the law firm in which he/she is a partner, and any entity
to which he/she is related. Among the documents
requested were copies of the firm's billing statements
reflecting the names and accounts of many of appellant's
clients. Appellant's accountants produced a substantial
majority of these documents, but withheld the remainder of
the documents, each of which contains names of the
appellant's former or current clients. The government
asserts that the withheld documents are needed to explain
those documents that were produced and to give the
government an accurate picture of appellant's finances.1
Appellant moved in New Jersey for (1) a protective order
preventing an AUSA in New Jersey from further disclosing
grand jury information to an AUSA in any district other
than New Jersey without first obtaining a court order, and
(2) an order modifying the subpoena to permit the redaction
of the names of appellant's clients. The District Court
denied both forms of relief.
II.
The government raises a threshold issue of jurisdiction.
Appellant's notice of appeal was filed 53 days after the
District Court's order denying appellant's motions was
entered and the government contends that this was
untimely under Federal Rule of Appellate Procedure 4(b).
Rule 4(b) provides that "[i]n a criminal case, a defendant's
notice of appeal must be filed in the district court within 10
days . . . of . . . the entry of either the judgment or the
order appealed. . . ." Fed.R.App.P. 4(b)(1)(A)(i). Appellant, on
the other hand, insists that his/her application for relief
was a civil case, and, under Rule 4(a)(1)(B), he/she had 60
days from the entry of the District Court's order to file a
notice of appeal.2
_________________________________________________________________
1. At this time, pursuant to an agreement between the AUSA in New
Jersey and appellant's accountants, all of the documents that were
previously withheld have been produced with the names of the
appellant's clients redacted pending the resolution of this appeal.
2. Rule 4(a)(1)(B) provides that "in a civil case . . . [w]hen the United
States or its officer or agency is a party, the notice of appeal may be
filed
by any party within 60 days after the judgment or order appealed from
is entered." Fed.R.App.P. 4(a)(1)(B).
3
We agree with appellant that his/her application to the
District Court was a "civil case" within the meaning of Rule
4. Accordingly, we conclude that we have jurisdiction over
this appeal.3
We spoke directly to this jurisdictional issue in United
States v. Lavin, 942 F.2d 177 (3d Cir. 1991) where we held
that the proceedings on a motion under 21 U.S.C.S 853(n)
to modify a forfeiture order entered as a part of a criminal
sentence constituted a "civil case" for purposes of Rule 4.
We explained:
The term "criminal case" in Rule 4(b) generally is
construed narrowly to encompass only a "prosecution
brought by the government to secure a sentence of
conviction for criminal conduct." Conversely, the term
"civil case" in Rule 4(a)(1) generally is construed
broadly to include "any action that is not a criminal
prosecution." As a result, proceedings that essentially
are civil in nature are deemed to be "civil cases," even
though they derive from a prior criminal prosecution.
* * *
Applying these principles to the case at bar, we are
convinced that a proceeding under 21 U.S.C. S 853(h)
. . . is a "civil case" for purposes of Rule 4(a)(1). As the
government concedes, a hearing to adjudicate the
validity of a third party's interest in forfeited property
is not a criminal prosecution, i.e., an action
commenced by the government to secure a sentence of
conviction for criminal conduct.
Id. at 181-82 (internal citations omitted) (emphasis in
original). Our reading of Rule 4 in Lavin is, of course,
_________________________________________________________________
3. Normally, an order declining to quash or narrow a subpoena is not a
final appealable order absent disobedience and a contempt citation.
However, "when a party, other than the one to whom a subpoena has
been addressed, moves to quash the subpoena, the denial of his motion
disposes of his claims fully and finally," it being unreasonable to expect
that a third party will risk contempt in order to facilitate immediate
review. In re Grand Jury, 619 F.2d 1022, 1025 (3d Cir. 1980).
Accordingly, the order currently before us is final for purposes of
appellate review.
4
consistent with the fact that Rule 4(b), dealing with
"criminal cases" speaks only of appeals by"defendants."
See also Lee v. Johnson, 799 F.2d 31, 36-37 (3d Cir. 1986)
(For purposes of the Equal Access to Justice Act, it is the
purpose of the proceeding that determines whether it is
civil or criminal. Thus, "a contempt proceeding aimed at
coercing compliance with a grand jury proceeding is civil in
nature . . . . A contempt proceeding aimed not at coercing
compliance but at punishing a condemnor for past defiance
of the process of the court is criminal in nature.").
While it is true that we have characterized grand jury
proceedings as criminal in nature, See, e.g., In re Grand
Jury Empanelled February 14, 1978, 597 F.2d 851 (3d Cir.
1979), this is not determinative under our reading of Rule
4 in Lavin. While appellant's motion was made in the
context of a grand jury proceeding, just as the motion in
Lavin was made in the context of a criminal action,
proceedings on that motion were clearly not proceedings by
the government to secure a sentence of conviction for
criminal conduct. Accordingly, those proceedings were
"civil" for purposes of Rule 4.4
III.
The government also objects to our entertaining this
appeal on the ground that appellant lacks standing to seek
either an injunction against further inter-district
disclosures of grand jury materials without a court order or
modification of the subpoena. We disagree.
Appellant is a subject of the grand jury investigation and
the allegedly unauthorized disclosures consist of
information about him/her obtained in the course of that
investigation. Among the interests protected by grand jury
_________________________________________________________________
4. In holding, as we do, that a motion to modify a subpoena is a civil
case within the meaning of Rule 4, we take a different view than two of
our sister circuits that have passed on the issue. See In re Grand Jury
Subpoenas 89-3 and 89-4, 902 F.2d 244, 247 (4th Cir. 1990); In re
Grand Jury Proceedings (Company X), 835 F.2d 237 (10th Cir. 1987) (per
curiam). But see In Re Grand Jury Proceedings (Manges), 745 F.2d 1250,
1251 (9th Cir. 1984) (holding that appeals from orders concerning grand
jury subpoenas are civil actions governed by Fed.R.App.P. 4(a)).
5
secrecy is the privacy interest of an investigation's subjects.
Douglas Oil Co. of Cal. v. Petrol Stops Northwest, 441 U.S.
211, 218 n. 8 (1979). If one in appellant's position does not
have standing to complain about unauthorized disclosures,
we fail to perceive how it would ever be possible to enforce
the rule of grand jury secrecy.
Standing to seek a modification of the subpoena presents
a different issue, but our conclusion must be the same.
Although the documents that are the subject of appellant's
motion for modification of the subpoena are in the hands of
appellant's accountants, they nevertheless belong to
appellant's firm. We have previously held that one who has
a property interest in the subject matter of a grand jury
subpoena has standing to challenge the subpoena and we
so hold here. See In re Grand Jury, 619 F.2d 1022, 1026
(3d Cir. 1980). This does not, of course, mean that
appellant's property interest will not have to yield to the
grand jury's interest in reviewing the documents, but that
is a merits issue. See id. Appellant has standing to attempt
to narrow the subpoena as well as to seek protection
against further inter-district disclosures. Accordingly, we
now turn to the merits.
IV.
Federal Rule of Criminal Procedure 6(e)(2) provides the
general rule with respect to grand jury secrecy:
(2) General Rule of Secrecy. A grand juror, an
interpreter, a stenographer, an operator of a recording
device, a typist who transcribes recorded testimony, an
attorney for the government, or any person to whom
disclosure is made under paragraph (3)(A)(ii) of this
subdivision shall not disclose matters occurring before
the grand jury, except as otherwise provided for in
these rules. . . . A knowing violation of Rule 6 may be
punished as a contempt of court.
Subsection (e)(3) provides exceptions to the general rule
of non-disclosure:
(3) Exceptions.
(A) Disclosure . . . may be made to --
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(i) an attorney for the government for use in the
performance of such attorney's duty; and
(ii) such government personnel (including
personnel of a state or subdivision of a state) as are
deemed necessary by an attorney for the government
to assist an attorney for the government in the
performance of such attorney's duty to enforce
federal criminal law.
Subsection (e)(3)(C) provides four additional exceptions,
three of which involve court approval and are not relevant
here. The fourth is significant in the current context:
(C) Disclosure . . . may also be made --
(iii) when the disclosure is made by an attorney for
the government to another federal grand jury.
An "attorney for the government" for the purposes of Rule
6 includes "the Attorney General, an authorized assistant of
the Attorney General, a United States Attorney,[and] an
authorized assistant of a United States Attorney."
Fed.R.Crim.P. 54(c).
In United States v. Sells Engineering, Inc., 463 U.S. 418(1983), the Supreme Court held that Rule 6(e)(3)(A)(i) does
not authorize disclosure without court approval to an
attorney for the government for use in a civil proceeding.
See id. at 442. In the course of so holding, the Court
reviewed the history of Rule 6 and the practice under
subsection (A)(i). Subsection (A)(i) was originally enacted in
1944; subsection (A)(ii) was added in 1977. Despite the
disparity in the text of subsections (A)(i) and (A)(ii), the
Court concluded that the purposes for which disclosure
may be made to a government attorney and to other
government personnel are the same. The Court found that
when Congress, in 1977, inserted the clause "duty to
enforce federal criminal law," in subsection (A)(ii), "it was
merely making explicit what it believed to be already
implicit in the existing (A)(i) language." Id. at 436. Thus, it
is clear that the authority granted by subsection (A)(i) is
authority for disclosure to "an attorney for the government
for use in the performance of such attorney's duty to
enforce federal criminal law."
7
Appellant urges us to find implicit in subsection (A)(i) a
limitation restricting disclosures by one AUSA to another
for use in the performance of the latter's criminal law
enforcement duties to intra-district communications. We
decline to do so. Rather, we will follow the Supreme Court's
advice in United States v. John Doe Inc. 1, 481 U.S. 102,
109 (1987) and "accept . . . Rule [6] as meaning what it
says." The text of subsection (A)(i) authorizes an AUSA to
disclose grand jury material to another AUSA "for use in
the performance of such attorney's [criminal] duties"
without regard to his or her location. There is no dispute
here that the disclosure to the receiving AUSA was for use
in the performance of his/her criminal law enforcement
duties, and we, accordingly, can find no fault with the
conduct of the government in this matter.
The only argument appellant can mount in the face of the
plain meaning of subsection (A)(i) is based on the manner
in which the Supreme Court summarized its holding in
Sells Engineering and a comment in a footnote in the
Court's opinion there. The Court summarized its holding as
follows: "We hold that (A)(i) disclosure is limited to use by
those attorneys who conduct the criminal matters to which
the materials pertain." Sells Eng'g, 463 U.S. at 427.
Footnote 11 observes that the legislative history shows
"fairly clearly that the reason why it was thought desirable
to allow disclosure to other prosecutors was to facilitate
effective working of the prosecution team." Id. at 429 n.11.
(emphasis in original). Appellant concludes from these
portions of Sells Engineering that (A)(i) disclosures are
limited to members of the "team" prosecuting the particular
matter that produced the grand jury information that was
disclosed.
We take a different view of the segments of Sells
Engineering that appellant emphasizes. First, the purpose
of both was to distinguish between use by the receiving
attorney for criminal law enforcement purposes and use by
him in civil proceedings. The issue of whether the (A)(i)
authorization is limited to some subset of disclosures to
government attorneys for use in criminal law enforcement
was not before the court, and, in context, it is clear that
neither of these statements was intended to express a view
on that subject.
8
Moreover, we believe appellant's reading of these portions
of Sells Engineering is unduly restrictive. Disclosures
among prosecutors working on the same prosecution is, of
course, the paradigm situation in which securing court
approval would be prohibitively burdensome, and the
drafters did, indeed, intend "to facilitate the effective
working of [such a] prosecution team." See id. However, this
does not mean the Supreme Court's reference to the
legislative history was intended to limit the (A)(i)
authorization to such a narrow range of disclosures. On the
contrary, the Court's summary of its holding is not limited
to disclosures between attorneys working on the same
matter. Rather, it speaks of "matters" and authorizes
disclosures to all "attorneys who conduct the criminal
matters to which the materials pertain." Id. at 427(emphasis supplied). This would seem to us to include any
government attorneys conducting other criminal matters to
which the materials disclosed are relevant. Thus, when
carefully parsed, we find the Court's summary entirely
consistent with the authority granted by a straight forward
reading of the text -- the authority to disclose to any
attorney for the government for use in the performance of
his duty to enforce federal criminal law.
Finally, we note that nothing in the Sells Engineering
opinion supports the notion that subsection (A)(i) contains
a geographic limitation. To the contrary, all members of the
Court seemed in agreement, for example, that disclosures
to supervisors at Main Justice in the District of Columbia
were authorized by subsection (A)(i).
We also conclude that recognizing appellant's geographic
limitation on the authority granted by subsection (A)(i)
would be difficult to reconcile with the absence of any
similar limitation in subsection (C)(iii). As we have noted,
subsection (C)(iii), which was added to Rule 6(e) in 1983,
provides explicit authorization for a disclosure"by an
attorney for the government [without court approval] to
another federal grand jury." Fed.R.Crim.P. 6(e)(3)(C)(iii).
This express authority contains no geographic limitation;
on its face it authorizes disclosures to grand juries in other
districts as well as successive grand juries in the same
district.
9
The Advisory Committee's Note indicates that absence of
such a geographic limitation was deliberate. The rationale
behind the authority conveyed, as described in the Note,
was that the "[s]ecrecy of grand jury materials should be
protected almost as well by the safeguards at the second
grand jury proceedings, including the oath of jurors, as by
judicial supervision of the disclosure of such materials."
Fed.R.Crim.P. 6(e)(3)(C)(iii) Advisory Committee Notes, 1983
amendments (quoting United States v. Malatesta , 583 F.2d
748 (5th Cir. 1978)). In addition to thus identifying a
rationale applicable to inter-district disclosures to a grand
jury as well as to intra-district ones, the Advisory Note also
indicates that subsection (C)(iii) was consistent with the few
prior cases that had considered the propriety of disclosures
to other grand juries in the absence of authority in the
rules. Prominent among the cases reflecting that
"preexisting practice" was the decision of the Fourth Circuit
Court of Appeals in United States v. Penrod, 609 F.2d 1092(4th Cir. 1979) which approved a disclosure of information
secured by a grand jury in the Eastern District of Virginia
to a grand jury sitting in the District of Columbia.
Subsection (C)(iii) thus reflects a Congressional desire to
expedite and facilitate the use of one grand jury's
information by other grand juries investigating other
crimes. We can perceive no reason why Congress would
have endorsed this inter-district use of grand jury
information without a court order while requiring a court
order for the inter-district disclosure of grand jury
information to the same AUSA who would be assisting the
receiving grand jury. In short, we are confident that
Congress, in 1983, viewed the preexisting subsection (A)(i)
and the new (C)(iii) to be complementary because it
understood that (A)(i), in accordance with its text, already
contained authority for inter-district disclosures without a
court order to government attorneys for use in criminal law
enforcement.
Federal crimes often involve inter-district activities and,
as a result, grand jury investigations conducted by United
States Attorneys often involve more than one district.
Moreover, while investigations in different districts may
initially appear unrelated, investigators frequently uncover
10
information showing them to be closely linked. Accordingly,
cooperation between United States Attorney's offices is
essential to the effective enforcement of federal criminal
laws. In fast moving investigations, delays in that
cooperation can exact a heavy toll. Congress apparently
determined that inter-district disclosures between AUSAs in
support of their criminal law enforcement responsibilities,
but without court supervision, could materially increase the
efficiency of criminal law enforcement efforts without
jeopardizing the interests that grand jury secrecy seeks to
protect. Those interests, as identified by the Supreme
Court, include: (1) preserving the willingness and candor of
witnesses called before the grand jury; (2) maintaining the
integrity of the investigations so that targets will not be
afforded an opportunity to flee or interfere with the grand
jury; and (3) preserving the rights of a suspect who might
later be exonerated. See Douglas Oil Co., 441 U.S. at 218-
19. None of these interests are likely to be compromised by
the transmission of grand jury material without a court
order from one AUSA to another in furtherance of their
criminal law enforcement duties, regardless of the district
in which the receiving AUSA practices. Rule 6(e)(2) requires
that all AUSAs, regardless of the district in which they
serve, maintain the secrecy of grand jury information.
Thus, as in the case of subsection (C)(iii) disclosures to the
members of a second grand jury, the recipient of a
disclosure pursuant to subsection (A)(i) will be subject to
the same duties of secrecy that bound the attorney making
the disclosure.
V.
Rule 17(c) provides that a "court on motion made
promptly may quash or modify [a] subpoena if compliance
would be unreasonable or oppressive." The burden of
production and the burden of persuasion to show that a
subpoena was unreasonable lies with the party resisting it.
United States v. R. Enterprises, Inc., 498 U.S. 292, 301
(1991). We review a District Court's decision under Rule
17(c) for an abuse of discretion only. See United States v.
Berrigan, 482 F.2d 171, 181 (3d Cir. 1973).
11
We agree with appellant that a "district court may, under
Fed.R.Crim.P. 17(c), quash or modify a subpoena duces
tecum independent of a finding of privilege where the
subpoena is unreasonable." Appellant's Br. p. 26. Appellant
has failed to show, however, that the subpoena in its
present form is unreasonable, oppressive, or improper in
any other way. Contrary to the appellant's assertion, there
has been no "showing of irregularity" that would shift to the
government the burden of demonstrating the subpoena's
reasonableness. See In re Grand Jury Proceedings
(Johanson), 632 F.2d 1033, 1041-42 (3d Cir. 1980).
Accordingly, we find no abuse of discretion.
VI.
The District Court's Order of May 17, 2001, will be
affirmed.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
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