Grand Jury Subpoena, In re
| Decision Date | 10 July 1997 |
| Docket Number | No. 97-55089,97-55089 |
| Citation | 119 F.3d 750 |
| Parties | 27 Envtl. L. Rep. 21,530, 97 Cal. Daily Op. Serv. 5460, 97 Daily Journal D.A.R. 8848 In re GRAND JURY SUBPOENA. UNITED STATES of America, Plaintiff-Appellee, v. ROCKWELL INTERNATIONAL CORPORATION, ROCKETDYNE DIVISION, Defendant, and John Doe, et al., Appellants. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Mark C. Holscher, James R. Asperger, Molly M. White, O'Melveny & Myers, Los Angeles, CA; John D. Vandevelde, John S. Crouchley, Talcott, Lightfoot, Vandevelde & Sadowsky, Los Angeles, CA; Leonard Sharenow, Los Angeles, CA, for appellants.
William W. Carter, Assistant United States Attorney, Los Angeles, CA, for plaintiff-appellee.
Appeal from the United States District Court for the Central District of California; John G. Davies, District Judge, Presiding. D.C. No. MISC-31170.
Before: THOMPSON and T.G. NELSON, Circuit Judges, and FITZGERALD, * District Judge.
Three potential targets of an ongoing grand jury investigation ("Does" or "the appellants") appeal the district court's refusal to exercise its supervisory powers to monitor the grand jury's proceedings and to hold a pre-indictment hearing pursuant to Kastigar v. United States, 406 U.S. 441, 92 S.Ct. 1653, 32 L.Ed.2d 212 (1972) (a "Kastigar hearing"). 1 Because we lack jurisdiction, we dismiss the appeal.
Rockwell International Corporation, Rocketdyne Division ("Rocketdyne"), is a company On January 25, 1995, two attorneys retained by Rocketdyne interviewed one of the appellants ("Doe # 1") at Rocketdyne's offices regarding the chemical-burning practices of Rocketdyne employees, which were the subject of a California OSHA administrative enforcement action. Rocketdyne alleges that prior to the interview, one of its attorneys advised Doe # 1 that she represented Rocketdyne, not Doe # 1, and that Rocketdyne held the attorney-client privilege and could waive it. Doe # 1 denies that Rocketdyne ever made such a representation prior to the interview. After the interview, Rocketdyne's attorneys prepared a memorandum summarizing the substance of the interview ("the Memorandum").
that tests and markets various rocket fuel compounds. On July 26, 1994, an explosion occurred at Rocketdyne's Santa Susana Field Laboratory in Simi Hills, California, killing two Rocketdyne employees and injuring a third employee. Rocketdyne conducted an internal investigation by interviewing several employees, including the appellants in this appeal, and examining physical evidence relating to the cause of the explosion. In September 1994, the internal investigative team completed its final report and submitted it to company officials.
On July 13, 1995, a federal criminal search warrant was served on Rocketdyne's offices at Simi Hills for evidence relating to the unlawful storage, treatment, and disposal of hazardous explosive waste. After the search warrant was served, Rocketdyne provided separate counsel for the appellants.
On April 11, 1996, Rocketdyne entered a corporate guilty plea to three violations of the Resource Conservation and Recovery Act (42 U.S.C. § 6928(d)(2)(A)). Pursuant to the plea agreement, Rocketdyne agreed to cooperate with and assist the Government in its ongoing investigation of the 1994 explosion, including identifying and locating witnesses with relevant information. Rocketdyne also agreed to provide certain internal documents relating to the explosion, including its internal investigation report and the Memorandum.
On May 20, 1996, the attorney for Doe # 1 advised the Government that Doe # 1 objected to the release of the Memorandum because at the time of the interview, Doe # 1 believed the interview would remain confidential. Because Rocketdyne refused to release the Memorandum until this dispute was resolved, the Government prepared a grand jury subpoena on June 17, 1996, to compel the memo's production by July 31, 1996.
On July 30, 1996, Doe # 1 filed a motion to quash the grand jury subpoena, arguing that the Memorandum prepared by Rocketdyne's attorneys was protected by either the attorney-client privilege or the "common interest" privilege. At a hearing on October 10, 1996, the district court inquired whether the Fifth Amendment issues discussed in Garrity v. New Jersey, 385 U.S. 493, 87 S.Ct. 616, 17 L.Ed.2d 562 (1967) (regarding compelled statements), were relevant to the case and requested supplemental briefing. Following supplemental briefing on the issue, the district court orally denied the motion to quash on October 24, 1996, ruling that the Memorandum was not protected by either asserted privilege. Regarding the Garrity issue, the district court orally ruled that its resolution was "premature."
On November 1, 1996, Doe # 1 filed a second supplemental memorandum with the district court, developing the argument that the Memorandum (summarizing Rocketdyne's interview of Doe # 1) and the internal investigation report (which contained interviews of Doe # 1 and the other appellants) were "compelled statements" protected by the Fifth Amendment. The other appellants joined Doe # 1's motion on these grounds. 2 The appellants asked the district court to exercise its supervisory powers and conduct a Kastigar hearing to determine whether the Government was improperly using these statements in the grand jury proceedings to seek indictments against them.
On December 19, 1996, the district court issued its written order denying the motion to quash the subpoena and denying the request to hold a Kastigar hearing. With respect to the appellants' request that the district court exercise its supervisory powers and hold a Kastigar hearing, the district court ruled:
Constitutional considerations are implicated only if the grand jury uses the testimony in reaching a decision to indict. No indictment has issued in this instance. Furthermore, the movants have not shown actual use of the statements against the movants within the grand jury proceedings sufficient to invoke Fifth Amendment protections. Thus, at this stage, a motion predicated on Fifth Amendment grounds is premature.
This timely appeal followed. 3
We lack jurisdiction over this interlocutory appeal. The appellants argue that we have jurisdiction to hear this appeal pursuant to 28 U.S.C. § 1291 and In re Grand Jury Subpoena Issued to Bailin, 51 F.3d 203 (9th Cir.), cert. denied, --- U.S. ----, 116 S.Ct. 472, 133 L.Ed.2d 402 (1995). The appellants are incorrect.
In Bailin, Edward Silva appealed the district court's denial of his motion to quash a grand jury subpoena issued to Bailin, Silva's tax accountant. Silva alleged that certain documents were privileged and thus not subject to disclosure. On the jurisdictional question, we noted that "[g]enerally, the denial of a motion to quash a subpoena is a nonappealable interlocutory order." Id. at 205. However, a narrow exception exists "where the subpoena is directed at a third party who 'cannot be expected to risk a contempt citation' in order to preserve the movant's right to appeal." Id. (quoting In re Grand Jury Subpoena Served Upon Niren, 784 F.2d 939, 941 (9th Cir.1986)). Under such circumstances, the district court's order is immediately appealable.
In this case, the appellants argue that they, too, are appealing the district court's denial of a motion to quash a subpoena that was directed at documents held by a third party: Rocketdyne. Like the appellant in Bailin, Doe # 1 argued in the district court that the subpoenaed documents were protected by two privileges: the attorney-client privilege and the "common interest" privilege. 4 The district court rejected these arguments, concluding that "[f]or these reasons, [Doe # 1's] motion to quash is DENIED."
The jurisdictional problem arises because the appellants have not appealed this conclusion by the district court. The appellants make no argument on appeal that the district court incorrectly denied the motion to quash or improperly failed to find that the targeted documents were privileged. Rather than object to the production of the targeted documents, the appellants only argue that the district court improperly refused to exercise its supervisory powers to hold a pre-indictment Kastigar hearing in order to determine if the Government was using the targeted documents in the grand jury proceedings to seek indictments against them. The district court treated this argument as a second motion, separate and distinct from the motion to quash the subpoena; it noted that it was reviewing the appellants' request that the court "exercise its supervisory powers to bar use of their allegedly compelled statements by the prosecution in the grand jury investigation, and to hold a Kastigar evidentiary hearing."
The appellants do not ask us in this appeal to reverse the district court's order and direct the entry of an order quashing the This case is similar to the situation presented in In re Federal Grand Jury Investigation of Fendler, 597 F.2d 1314 (9th Cir.1979). In Fendler, the appellant appealed a district court's interlocutory order denying his petition to conduct a voir dire of the grand jurors in an ongoing grand jury investigation "regarding their possible bias, prejudice, or economic interest." Id. at 1315. Noting that "[a]ppellate courts are particularly reluctant to intrude into grand jury proceedings," we dismissed the appeal for lack of jurisdiction. Id. at 1315-16.
grand jury subpoena. Instead, the appellants ask us to reverse and "instruct the district court to prevent the Government from using the targets' compelled statements to obtain an indictment against them." (Appellants' Opening Brief at 29-30.) The part of the district court's order refusing to exercise its supervisory powers over ongoing grand jury proceedings, however, is not a final appealable order, and we lack jurisdiction to review it
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