504 U.S. 36 (1992), 90-1972, United States v. Williams

Docket Nº:No. 90-1972
Citation:504 U.S. 36, 112 S.Ct. 1735, 118 L.Ed.2d 352, 60 U.S.L.W. 4348
Party Name:United States v. Williams
Case Date:May 04, 1992
Court:United States Supreme Court

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504 U.S. 36 (1992)

112 S.Ct. 1735, 118 L.Ed.2d 352, 60 U.S.L.W. 4348

United States



No. 90-1972

United States Supreme Court

May 4, 1992

Argued Jan. 22, 1992




Respondent Williams was indicted by a federal grand jury for alleged violations of 18 U.S.C. § 1014. On his motion, the District Court ordered the indictment dismissed without prejudice because the Government had failed to fulfill its obligation under Circuit precedent to present "substantial exculpatory evidence" to the grand jury. Following that precedent, the Court of Appeals affirmed.


1. The argument that the petition should be dismissed as improvidently granted because the question presented was not raised below was considered and rejected when this Court granted certiorari, and is rejected again here. The Court will not review a question that was neither pressed nor passed on below, see e.g., Stevens v. Department of Treasury, 500 U.S. 1, 8, but there is no doubt that the Court of Appeals passed on the crucial issue of the prosecutor's duty to present exculpatory evidence to the grand jury. It is appropriate to review an important issue expressly decided by a federal court where, as here, although the petitioner did not contest the issue in the case immediately at hand, it did so as a party to the recent proceeding upon which the lower courts relied for their resolution of the issue, and did not concede in the current case the correctness of that precedent. Pp. 40-45.

2. A district court may not dismiss an otherwise valid indictment because the Government failed to disclose to the grand jury "substantial exculpatory evidence" in its possession. Pp. 45-55.

(a) Imposition of the Court of Appeals' disclosure rule is not supported by the courts' inherent "supervisory power" to formulate procedural rules not specifically required by the Constitution or the Congress. This Court's cases relying upon that power deal strictly with the courts' control over their own procedures, whereas the grand jury is an institution separate from the courts, over whose functioning the courts do not preside. Any power federal courts may have to fashion, on their own initiative, rules of grand jury procedure is very limited, and certainly would not permit the reshaping of the grand jury institution that would be the consequence of the proposed rule here. Pp. 45-50.

(b) The Court of Appeals' rule would neither preserve nor enhance the traditional functioning of the grand jury that the "common law" of

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the Fifth Amendment demands. To the contrary, requiring the prosecutor to present exculpatory, as well as inculpatory, evidence would alter the grand jury's historical role, transforming it from an accusatory body that sits to assess whether there is adequate basis for bringing a criminal charge into an adjudicatory body that sits to determine guilt or innocence. Because it has always been thought sufficient for the grand jury to hear only the prosecutor's side, and, consequently that the suspect has no right to present, and the grand jury no obligation to consider, exculpatory evidence, it would be incompatible with the traditional system to impose upon the prosecutor a legal obligation to present such evidence. Moreover, motions to quash indictments based upon the sufficiency of the evidence relied upon by the grand jury have never been allowed, and it would make [112 S.Ct. 1737] little sense to abstain from reviewing the evidentiary support for the grand jury's judgment while scrutinizing the sufficiency of the prosecutor's presentation. Pp. 51-55.

(c) This Court need not pursue respondent's argument that the Court of Appeals' rule would save valuable judicial time. If there is any advantage to the proposal, Congress is free to prescribe it. P. 55.

899 F.2d 898 (CA10 1990), reversed and remanded.

SCALIA, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, KENNEDY, and SOUTER, JJ., joined. STEVENS, J., filed a dissenting opinion, in which BLACKMUN and O'CONNOR, JJ., joined, and in Parts II and III of which THOMAS, J., joined, post, p. 55.

SCALIA, J., lead opinion

JUSTICE SCALIA delivered the opinion of the Court.

The question presented in this case is whether a district court may dismiss an otherwise valid indictment because the

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Government failed to disclose to the grand jury "substantial exculpatory evidence" in its possession.


On May 4, 1988, respondent John H. Williams, Jr., a Tulsa, Oklahoma, investor, was indicted by a federal grand jury on seven counts of

knowingly mak[ing] [a] false statement or report . . . for the purpose of influencing . . . the action [of a federally insured financial institution],

in violation of 18 U.S.C. § 1014 (1988 ed., Supp. II). According to the indictment, between September, 1984, and November, 1985, Williams supplied four Oklahoma banks with "materially false" statements that variously overstated the value of his current assets and interest income in order to influence the banks' actions on his loan requests.

Williams' misrepresentation was allegedly effected through two financial statements provided to the banks, a "Market Value Balance Sheet" and a "Statement of Projected Income and Expense." The former included as "current assets" approximately $6 million in notes receivable from three venture capital companies. Though it contained a disclaimer that these assets were carried at cost, rather than at market value, the Government asserted that listing them as "current assets" -- i.e., assets quickly reducible to cash -- was misleading, since Williams knew that none of the venture capital companies could afford to satisfy the notes in the short term. The second document -- the Statement of Projected Income and Expense -- allegedly misrepresented Williams' interest income, since it failed to reflect that the interest payments received on the notes of the venture capital companies were funded entirely by Williams' own loans to those companies. The Statement thus falsely implied, according to the Government, that Williams was deriving interest income from "an independent outside source." Brief for United States 3.

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Shortly after arraignment, the District Court granted Williams' motion for disclosure of all exculpatory portions of the grand jury transcripts, see Brady v. Maryland, 373 U.S. 83 (1963). Upon reviewing this material, Williams demanded that the District Court dismiss the indictment, alleging that the Government had failed to fulfill its obligation under the Tenth Circuit's prior decision in United States v. Page, 808 F.2d 723, 728 (1987), to present "substantial exculpatory evidence" to the grand jury (emphasis omitted). His contention was that evidence which the Government had chosen not to present to the grand jury -- in particular, Williams' general ledgers and tax returns, and Williams' testimony in his contemporaneous [112 S.Ct. 1738] Chapter 11 bankruptcy proceeding -- disclosed that, for tax purposes and otherwise, he had regularly accounted for the "notes receivable" (and the interest on them) in a manner consistent with the Balance Sheet and the Income Statement. This, he contended, belied an intent to mislead the banks, and thus directly negated an essential element of the charged offense.

The District Court initially denied Williams' motion, but upon reconsideration ordered the indictment dismissed without prejudice. It found, after a hearing, that the withheld evidence was "relevant to an essential element of the crime charged," created "`a reasonable doubt about [respondent's] guilt,'" App. to Pet. for Cert. 23a-24a (quoting United States v. Gray, 502 F.Supp. 150, 152 (DC 1980)), and thus "render[ed] the grand jury's decision to indict gravely suspect." App. to Pet. for Cert. 26a. Upon the Government's appeal, the Court of Appeals affirmed the District Court's order, following its earlier decision in Page, supra. It first sustained as not "clearly erroneous" the District Court's determination that the Government had withheld "substantial exculpatory evidence" from the grand jury, see 899 F.2d 898, 900-903 (CA10 1990). It then found that the Government's behavior "`substantially influence[d]'" the grand jury's decision to indict, or, at the very least, raised a "`grave doubt that the

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decision to indict was free from such substantial influence,'" id. at 903 (quoting Bank of Nova Scotia v. United States, 487 U.S. 250, 263 (1988)); see id. at 903-904. Under these circumstances, the Tenth Circuit concluded, it was not an abuse of discretion for the District Court to require the Government to begin anew before the grand jury.[1] We granted certiorari, 502 U.S. 905 (1991).


Before proceeding to the merits of this matter, it is necessary to discuss the propriety of reaching them. Certiorari was sought and granted in this case on the following question:

Whether an indictment may be dismissed because the government failed to present exculpatory evidence to the grand jury.

The first point discussed in respondent's brief opposing the petition was captioned "The `Question Presented' in the Petition Was Never Raised Below." Brief in Opposition 3. In granting certiorari, we necessarily considered and rejected that contention as a basis for denying review.

JUSTICE STEVENS' dissent, however, revisits that issue, and proposes that -- after briefing, argument, and full consideration of the issue by all the Justices of this Court -- we now decline to entertain this petition for the same reason we originally rejected, and that we dismiss it as improvidently granted. That would be improvident indeed. Our grant of certiorari was entirely in accord with our traditional practice, though even if it were not, it would be imprudent (since there is no doubt that we have jurisdiction to entertain the...

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