601 F.2d 162 (5th Cir. 1979), 79-1671, In re Grand Jury Proceedings

Docket Nº:79-1671.
Citation:601 F.2d 162
Party Name:In re GRAND JURY PROCEEDINGS. Robert M. McCoy and Charles Sussman, Appellants.
Case Date:August 07, 1979
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 162

601 F.2d 162 (5th Cir. 1979)

In re GRAND JURY PROCEEDINGS.

Robert M. McCoy and Charles Sussman, Appellants.

No. 79-1671.

United States Court of Appeals, Fifth Circuit

August 7, 1979

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Albert J. Datz, Jacksonville, Fla., for appellants.

Ernst D. Mueller, Asst. U. S. Atty., Jacksonville, Fla., for appellee.

Appeal from the United States District Court for the Middle District of Florida.

Before GOLDBERG, FAY and RUBIN, Circuit Judges.

ALVIN B. RUBIN, Circuit Judge:

Robert M. McCoy, who had been engaged in business as a customshouse broker, and Charles Sussman, an accountant employed by McCoy's lawyer to analyze some of McCoy's records, appeal from judgments that they were each guilty of contempt for refusing to comply with grand jury Subpoenas duces tecum requiring, in sweeping terms, the production of numerous documents and records relating to McCoy's business and analyses of them prepared by Sussman. Considering the objections raised by McCoy, we conclude that some of the documents requested were records of a business legally required to be kept. However, McCoy's subpoena was so unqualified and pervasive in scope that it required him to determine at his peril what documents he was required to produce.

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The subpoena served on Sussman was overbroad, because it encompassed documents created by him at the request of McCoy's attorney to assist the lawyer in preparing for litigation. These documents are protected from compulsory disclosure because they are the work product of the attorney. Therefore, we vacate the judgments holding McCoy and Sussman in contempt of court without prejudice to the issuance of subpoenas sufficiently specific in terms.

I. Facts

McCoy was the sole proprietor and operator of a customshouse brokerage office. His business consisted of negotiating with offices of the United States Customs Service to determine the correct amount of duties owed on goods being imported into the United States by the firm's clients. McCoy's firm also collected money with which to pay these duties. While McCoy handled much of this business personally, one or more employees had managerial responsibilities.

Before McCoy terminated his business in 1975, representatives of the United States Customs Service attempted to inspect his records at the brokerage office in accordance with regulations requiring customshouse brokers to maintain records of their business and to allow access to them. 19 C.F.R. §§ 111.21 Et seq. On advice of counsel, McCoy refused to permit the inspection. Shortly thereafter the business was terminated, and McCoy had the records stored in a number of locations; he alleges that their whereabouts are known only to him.

A grand jury later commenced investigation of McCoy's business activities, including alleged instances of double-billing clients, nonpayment of refunds owed to clients, other alleged violations of the mail fraud statute, 18 U.S.C. § 1341, and possible violations of the anti-racketeering statute, 18 U.S.C. § 1962(c). In 1978 McCoy was served with a Subpoena duces tecum addressed to the "Authorized Custodian of Documents or Duly Authorized Representative Thereof Robert M. McCoy Customshouse Broker Foreign Freight Forwarder 733 Lem Turner Road, Jacksonville, Florida" and requiring the production of numerous records and documents, including many personal records. After a hearing on a motion to quash the subpoena, at which numerous objections to the subpoena were urged, its scope was considerably narrowed; McCoy was nonetheless directed to produce the following materials for the period 1970 to 1977:

3. Any and all monthly, quarterly and annual (whether calendar or fiscal) financial statements and any and all work papers, schedules, memoranda, notes, or records used in the preparation of these financial statements.

4. Any and all brokerage account statements, which reflect the business' financial status or interest.

9. Any and all of the following records and documents which are or were maintained by the business for the aforementioned time period.

  1. journals reflecting receipts and disbursements,

  2. ledgers, general and subsidiary,

  3. registers,

  4. charts of accounts,

  5. check request,

  6. payroll records, to include, but not be limited to the following: payroll registers, payroll sheets, payroll cards, time sheets,

  7. vouchers, bills, receipts, invoices and any other supporting documents related to all expenditures, reimbursements and billing procedures,

  8. contracts to which the business or its responsibilities are parties thereto,

    I. ship's files and voyage files,

  9. any and all computer or mechanical printouts of records which reflect the financial condition or activity of the business,

  10. Supplementary Customs Duty and Refund Ledgers,

  11. all Customs entries with all supporting documents required to be maintained by U.S. Customs Regulations, Section 111,

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  12. all correspondence, including envelopes and other papers maintained by the business,

  13. all mailing records and receipts to include but not limited to certified, registered and insured mailings.

    The district court denied McCoy's motion to quash the subpoena as narrowed, and it later granted the government's motion to compel production of the documents. When McCoy announced in open court that he would not produce the documents, the court, after a further hearing, adjudged him in contempt.

    In 1975, while McCoy was involved in divorce proceedings, his attorney in those proceedings advised him that he might be subject to a criminal prosecution in connection with his receipt and disbursement of funds from his clients. McCoy and his divorce lawyer then consulted another attorney with experience in criminal matters about McCoy's criminal exposure. The latter attorney requested that the divorce attorney prepare analyses of McCoy's financial transactions. The divorce attorney engaged Sussman, an accountant, for that purpose. Sussman obtained documents from McCoy and McCoy's regular accountant and prepared the requested financial analyses.

    In 1978 Sussman was served with a Subpoena duces tecum directing him to produce "all books, papers, documents, records, and other things . . . (described below) relating to" McCoy, McCoy's brokerage office, and/or various relatives of McCoy. This subpoena was later narrowed by elimination of the reference to documents concerning McCoy's relatives; however, it continued to embrace, in part, the following records covering the period 1970 through 1977:

    3. Any and all copies of financial statements, audit reports, certified audit reports, management reports and documents or records used in supporting these statements or reports for the aforementioned individual, entity or entities for the aforementioned time periods.

    4. Any and all files, schedules, correspondence, memoranda, records or documents that pertain to the aforementioned individual, entity or entities for the aforementioned time periods.

    6. Any and all records, documents, journals, logs, time sheets or client ledger cards reflecting fees and charges including those reflecting amounts paid by the aforementioned individual, entity or entities, on behalf of the aforementioned individual, entity or entities, or to the aforementioned individual, entity or entities.

    The district court refused Sussman's motion...

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