597 F.3d 189 (4th Cir. 2010), 06-2125, In re Grand Jury Subpoena (T-112)

Docket Nº:06-2125, 07-1646, 06-2220, 06-2313.
Citation:597 F.3d 189
Opinion Judge:WILKINSON, Circuit Judge:
Party Name:In re GRAND JURY SUBPOENA (T-112) v. Under Seal # 10, Movant-Appellant. United States of America, Petitioner-Appellee, Under Seal # 1; Under Seal # 2; Under Seal # 3; Under Seal # 4; Under Seal # 5; Under Seal # 6; Under Seal # 7; Under Seal # 8; Under Seal # 9; Under Seal # 11; Under Seal # 12; Under Seal 13; Under Seal # 14; Under Seal # 15; , Un
Attorney:Steven Karl Barentzen, The Law Office of Steven Barentzen, Washington, DC; Nancy Anne Luque, Luque Geragos Marino, LLP, Washington, DC, for Appellants. Gordon D. Kromberg, Office of the United States Attorney, Alexandria, Virginia, for Appellee. Mitka T. Baker, DLA Piper U.S. LLP, Washington, DC,...
Judge Panel:Before TRAXLER, Chief Judge, WILKINSON, Circuit Judge, and MARGARET B. SEYMOUR, United States District Judge for the District of South Carolina, sitting by designation. Affirmed by published opinion. Judge WILKINSON wrote the opinion, in which Judge SEYMOUR joined. Chief Judge TRAXLER wrote a sep...
Case Date:February 24, 2010
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit
 
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597 F.3d 189 (4th Cir. 2010)

In re GRAND JURY SUBPOENA (T-112)

United States of America, Petitioner-Appellee,

v.

Under Seal # 10, Movant-Appellant.

Under Seal # 1; Under Seal # 2; Under Seal # 3; Under Seal # 4; Under Seal # 5; Under Seal # 6; Under Seal # 7; Under Seal # 8; Under Seal # 9; Under Seal # 11; Under Seal # 12; Under Seal 13; Under Seal # 14; Under Seal # 15; , Under Seal # 16; Under Seal # 17, Under Seal # 18; Under Seal # 19; Under Seal # 20; Under Seal # 21; Under Seal # 22; Under Seal # 23; Under Seal # 24; Under Seal # 25; Under Seal # 26; Under Seal # 27; Under Seal # 28; Under Seal # 29; Under Seal # 30; Under Seal # 31; Under Seal # 32; Under Seal # 33; Under Seal # 34, Movants.

In re Grand Jury Subpoena (T-112)

United States of America, Petitioner-Appellee,

v.

Under Seal # 1-# 11, Movants-Appellants.

In re Grand Jury Subpoena (T-112)

United States of America, Petitioner-Appellee,

v.

Under Seal # 1; Under Seal # 2; Under Seal # 3; Under Seal # 4; Under Seal # 5; Under Seal # 6; Under Seal # 7; Under Seal # 8; Under Seal # 9; Under Seal # 10; Under Seal # 11, Movants-Appellants.

Under Seal # 13, Movant.

In re Grand Jury Subpoena (T-112)

united States of America, Petitioner-Appellee,

v.

Under Seal # 1, Movant-Appellant.

Nos. 06-2125, 07-1646, 06-2220, 06-2313.

United States Court of Appeals, Fourth Circuit.

February 24, 2010

Argued Sept. 23, 2009.

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[Copyrighted Material Omitted]

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ARGUED:

Steven Karl Barentzen, The Law Office of Steven Barentzen, Washington, DC; Nancy Anne Luque, Luque Geragos Marino, LLP, Washington, DC, for Appellants.

Gordon D. Kromberg, Office of the United States Attorney, Alexandria, Virginia, for Appellee.

ON BRIEF:

Mitka T. Baker, DLA Piper U.S. LLP, Washington, DC, for Appellants.

Chuck Rosenberg, United States Attorney, Alexandria, Virginia, for Appellee.

Before TRAXLER, Chief Judge, WILKINSON, Circuit Judge, and MARGARET B. SEYMOUR, United States District Judge for the District of South Carolina, sitting by designation.

Affirmed by published opinion. Judge WILKINSON wrote the opinion, in which Judge SEYMOUR joined. Chief Judge TRAXLER wrote a separate opinion concurring in part and dissenting in part.

OPINION

WILKINSON, Circuit Judge:

The twelve interrelated corporations in this case refused to turn over documents demanded by grand jury subpoenas duces tecum and now appeal a district court decision holding them in civil contempt.1 One of the corporations, known as Appellant # 10, alleges that it was the subject of unlawful National Security Agency wiretapping. It thus claims it had just cause to refuse to comply with its subpoena on the basis of purported constitutional violations as well as alleged violations of the Foreign Intelligence Surveillance Act of 1978 (FISA) and Title III of the Omnibus Crime Control and Safe Streets Act of 1968, which govern foreign and domestic surveillance, respectively. The other eleven corporations claim the district court abused its discretion by holding them in civil contempt because its orders to comply with the subpoenas were ambiguous.

For the reasons that follow, we hold that a grand jury enforcement action is not the appropriate place to litigate the validity of Appellant # 10's surveillance claims. Additionally, the district court, which was in the best position to interpret its orders and the refusals of the other eleven appellants to comply with them, did not abuse its discretion by holding them in civil contempt. We thus affirm the assessments imposed on the various appellants.

I.

Appellants are a group of twelve interrelated for-profit and not-for-profit corporations suspected of participating in the financing of terrorist activity. In March 2002, search warrants were executed at the offices shared by appellants and other related corporations as well as at the homes of several of the corporations' principals. Many documents were seized before being returned approximately eighteen months later in some two hundred

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boxes. The documents were then placed in a storage unit by appellants' shared counsel, Nancy Luque, and maintained by her in the condition in which they were received. Appellants never had actual possession of the documents after March 2002.

Subsequently, in early 2006, an unrelated grand jury issued subpoenas duces tecum to each of the appellants through their common counsel, Ms. Luque. The subpoenas were broad-ranging and covered all aspects of the entities' operations. For instance, the subpoena to Appellant # 10 demanded " all corporate records and books of account" since 2000 and also demanded any and all documents from any time period in fifteen separate categories dealing with a wide variety of financial transfers, overseas affiliates, and personnel decisions.

Among other things, the subpoenas requested evidence in appellants' constructive possession, which was defined to include documents in the possession of appellants' agents or attorneys. Appellants admit that many of the documents returned following the 2002 investigation were sought by the 2006 grand jury subpoenas. Br. of Appellants at 9. The various subpoenas initially demanded production by February 23 or 28, 2006, but no production was forthcoming on those dates.

Following preliminary discussions between appellants and the United States, attorney Luque indicated on March 16 that no production would be forthcoming unless the government affirmed or denied whether any of the appellant corporations were subject to electronic surveillance under Title III of the Omnibus Crime Control and Safe Streets Act of 1968, 18 U.S.C. §§ 2510-2522 (Title III), the Foreign Intelligence Surveillance Act of 1978 (FISA), 50 U.S.C. §§ 1801 et seq. , or the National Security Agency's (NSA's) then-recently disclosed electronic surveillance program. Following 18 U.S.C. § 3504(a)(1), the United States promptly wrote the corporations, stating that they " were not and are not a subject of electronic surveillance pursuant to Title III" but denying that appellants were entitled to notification of any other surveillance.

After appellants produced no documents through the end of March 2006, the district court entered show cause orders for all twelve entities to explain why they should not be held in contempt. A show cause hearing occurred on May 2, 2006. At the hearing, appellants argued that a contempt finding would be premature because the grand jury subpoenas were not themselves court orders. In response, the district court refrained from holding appellants in contempt, instead making the following statement on the record:

And likewise with the entities represented by Ms. Luque, I'm ordering them to compel-to comply with the subpoena that's been served on them. I'm ordering them to appear before the grand jury at the next date [,] and I'm ordering them to produce the documents called for by the subpoena.

Nor was this the only time at the May 2 hearing that the district court commanded full compliance with the subpoenas. After ascertaining that the grand jury would be sitting two days later, the district court stated, " I'm going to order them [appellants] to appear May 4th.... [T]hey're ordered to appear before the grand jury and to produce documents." Finally, at the close of the hearing, the district court made one last, explicit statement, noting that " Ms. Luque's client is being given an unambiguous, clear order to comply. " (emphasis added). Assuming that appellants were likely to file motions to quash the subpoenas, the court also set a schedule

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for briefing with a hearing to be held on June 8.

In spite of these orders, appellants provided only a limited number of documents on May 4 and asked for an extension until May 12. The district court denied the motion on May 5 in a written order that stated " Production must proceed forth-with and must be complete as counsel can make it no later than May 12, 2006." (emphasis in original).

On May 17, eleven of the twelve appellants produced responsive documents. They did not, however, produce any of the documents seized in 2002 and maintained by their attorney. Additionally, the last appellant, Appellant # 10, did not produce any responsive documents at all, electing instead to challenge the legality of the alleged government wiretaps.

On June 7, one day before the next scheduled hearing, Appellant # 10 moved for a finding that it was not in civil con tempt. The corporation argued that it had just cause for its refusal to comply with the subpoena based on the allegation that it was subject to illegal electronic surveillance. The basis for this argument was an assertion by Appellant # 10's lawyer that the corporation and its principals were suspected of terrorist financing and had offices all over the world, thus making them likely targets of electronic surveillance. Additionally, Appellant # 10's lawyer asserted that she and her clients " heard strange noises, including clicking sounds" while talking on the telephone.

The other eleven appellants took a different route at the hearing the next day, arguing they could not be held in contempt unless the government renewed its show cause motion. While the district court was far from convinced, out of an abundance of caution it postponed any decision so the government could renew its motion with regard to all twelve corporations. Yet another hearing was scheduled for June 28, 2006.

At that hearing, attorney Luque argued that the eleven appellants were not in contempt because by this time they had produced all documents in their actual physical control. Under questioning from the district court...

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