191 F.3d 173 (2nd Cir. 1999), 99-1143, United States v John Doe #1, #2, and #3

Docket Nº:Docket No. 99-1143
Citation:191 F.3d 173
Case Date:September 07, 1999
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

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191 F.3d 173 (2nd Cir. 1999)




JOHN DOE #1, JOHN DOE #2, JOHN DOE #3, Appellees.

Docket No. 99-1143

United States Court of Appeals, Second Circuit

September 7, 1999

Argued: July 12, 1999

Appeal from the March 2, 1999 order of the United States District Court for the Southern District of New York (John E. Sprizzo, District Judge), denying the government's motion to compel three former officers of a corporation to comply with grand jury subpoenas that called for the production of corporate documents in their possession.


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ANDREA LIKWORNIK WEISS, Assistant United States Attorney, New York, NY (Mary Jo White, United States Attorney for the Southern District of New York, Alex Young K. Oh, Ira M. Feinberg, Assistant United States Attorneys, New York, NY, on the brief), for Appellant.

JEROME GOTKIN, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Boston, MA (Joseph F. Savage, Jr., Testa, Hurwitz & Thibeault, LLP., Boston, MA, on the brief), for Appellee John Doe I.

RICHARD D. WEINBERG, Morvillo, Abramowitz, Grand, Iason & Silberberg, P.C., New York, NY (Anirudh Bansal, New York, NY, on the brief), for Appellee John Doe II.

JOEL COHEN, Stroock & Stroock & Lavan, New York, NY (Michele L. Pahmer, New York, NY, on the brief), for Appellee John Doe III.

Before: WINTER, Chief Judge, WALKER, and CABRANES, Circuit Judges.

Judge Cabranes dissents in a separate opinion.

WALKER, Circuit Judge:

This case presents the question of whether an ex-employee of a corporation may assert a Fifth Amendment privilege to refuse to respond to a grand jury subpoena demanding that he produce documents belonging to his former employer on the ground that the act of producing the documents would be both testimonial and incriminating. Because we conclude that a Fifth Amendment privilege is available to the ex-employee in such circumstances, we affirm the order of the district court denying the government's motion to compel production pursuant to the subpoenas in this case.


The essential facts in this appeal are undisputed. The subpoenas the government seeks to enforce were issued by a grand jury in the Southern District of New York in connection with the government's criminal investigation of a corporation and its employees. The alleged wrongdoing, which included falsification of the corporation's books and records and the misapplication of funds in the corporation's custody, occurred between 1993 and 1996 in one division of the corporation. In the spring of 1999, the corporation pled guilty to making false entries in its books and records, and, pursuant to a plea agreement, agreed to cooperate in the government's ongoing investigation of a number of individuals who may have been involved in the improper corporate activities.

Doe I, Doe II and Doe III were all officers of the corporation during the period in which the illegal activities occurred, and worked in the division where the

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wrongdoing took place. Before the subpoenas sought to be enforced were issued, the employees resigned from the corporation or their employment was terminated.

I. The 1996 Subpoenas

In June, September and October of 1996, the grand jury issued subpoenas to the corporation for records related to the investigation. The June subpoena, which was limited in scope, was not included in the record on appeal and was not presented to the district court. The government moved in this court to supplement the record to include the June subpoena, as well as two severance agreements between the corporation and Doe II and Doe III on the ground that such documents are material to the issues raised in this appeal. For completeness of the record, we grant the motion.1 The September subpoena was broad in scope, covering virtually all of the conduct ultimately investigated; the October subpoena supplemented the September subpoena, calling for the production of two specific documentary items.

Doe I and Doe II were corporate officers when all three subpoenas were served on the corporation and during the time in which the corporation responded to the subpoenas. In fact, an affidavit filed by the corporation's counsel suggests that an attorney for the corporation met with Does I and II separately and asked them to produce responsive documents. Both Doe I and Doe II produced some responsive documents, but are alleged to have retained others. Doe I and Doe II left the corporation's employment in March and July of 1997, respectively. When Doe II resigned, he signed a severance agreement in which he agreed to cooperate with the corporation in any investigation to follow.

Doe III resigned from the company in mid-July, 1996, after the June subpoena was issued and served. The corporation's attorney attempted to contact Doe III to inquire whether she had responsive documents, but was unable to do so. The record is silent, however, on whether Doe III was aware of the June subpoena during the time she was still employed at the company. In any event, the government does not rely on Doe III's awareness of the June 1996 subpoena in its arguments on appeal. Upon her departure, Doe III also entered into a severance agreement with the corporation, dated July 16, 1996, in which she too agreed to cooperate with any investigation that followed.

II. The January 1999 Subpoenas

Upon learning in January 1999 that a former company employee, not a party to these proceedings, had in her possession incriminating corporate records that were responsive to the 1996 subpoenas, but which had not been produced by the corporation, the government served grand jury subpoenas on twelve former employees - including Does I, II and III - whom the government believed maintained relevant records during their employment. The subpoenas each demanded "[a]ny and all records, documents, instructions, memoranda, notes and papers (whether in computerized or other form) in your care, custody, possession or control, that were created during the course of, or in connection with, your employment at [the corporation]."

Nine of the twelve former employees produced responsive documents. Doe I, Doe II and Doe III, however, declined to produce such documents, and asserted a Fifth Amendment privilege against their production. Doe II, alone, admitted to possessing responsive documents.2

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III. Proceedings in the District Court

On February 19, 1999, the government moved in Part I of the District Court to compel Doe I, Doe II and Doe III to produce documents demanded by the January 29, 1999 subpoenas. The motion, filed under seal, argued that the responsive documents were corporate documents and that Doe I, Doe II and Doe III remained corporate custodians of those documents after they left the corporation. Accordingly, the government contended, the former officers' claim of Fifth Amendment privilege was precluded by Braswell v. United States, 487 U.S. 99 (1988), in which the Supreme Court, in an opinion authored by the Chief Justice, rejected a Fifth Amendment act of production privilege claim by a current employee and held that "the custodian's act of production is not deemed a personal act, but rather an act of the corporation. Any claim of Fifth Amendment privilege asserted by the agent would be tantamount to a claim of privilege by the corporation - which of course possesses no such privilege." Braswell, 487 U.S. at 110.

All three appellees opposed the motion, not on the ground that the Fifth Amendment protected the contents of the subpoenaed documents, but rather on the ground that they had a Fifth Amendment right not to produce the documents because that act of production itself was (1) compelled, (2) testimonial, and (3) incriminating, in that compliance was the equivalent of forced testimony as to the existence, unlawful possession, and/or authenticity of the documents, as well as a belief that the produced documents matched those requested by the subpoena. SeeFisher v. United States, 425 U.S. 391, 410 (1976).

After full briefing and oral argument, Judge Sprizzo denied the government's motion to compel in a ruling issued from the bench. The district court relied on our pre-Braswell decision, In re Grand Jury Subpoenas Duces Tecum Dated June 13, 1983 and June 22, 1983, 722 F.2d 981, 986-87 (2d Cir. 1983) [hereinafter "Saxon Industries"), and the Fifth Amendment act of production doctrine established by the Supreme Court in cases such as Fisher and United States v. Doe, 465 U.S. 605 (1984), to hold that "the act of testimonial [production] on behalf of a person who is no longer with the corporation is self-incrimination in its classic sense of the word, and the Constitution does not permit it." Judge Sprizzo stated further that the "question of testimonial incrimination is at its height when [the document] is produced by a person who is no longer employed by the corporation, because there is an inference that [he] may have stolen [it]." He noted that his holding was "predicated not only upon Saxon, but upon what I would do if Saxon were not even on the books. . . . Saxon just happens to hold the same way, but in fact if Saxonwere not on the books, I would have reached the same conclusion."


On appeal, the government contends that the district court erred in refusing to apply Braswell to reject a Fifth Amendment act of production privilege claim by former employees holding corporate documents. For the reasons that follow, we disagree. Some legal background is needed.

The Fifth Amendment provides, "No person . . . shall be compelled in any criminal case to be a witness against himself." Beginning with...

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