IN RE SPECIAL, SEPT. 1983, GRAND JURY, Misc. 83-199.

• Decision Date: 09 May 1985
• Docket Number: No. Misc. 83-199.,Misc. 83-199.
• Citation: 608 F. Supp. 538
• Parties: In re the SPECIAL, SEPTEMBER 1983, GRAND JURY. In the Matter of Lee J. KLEIN (Witness).
• Court: U.S. District Court — Southern District of Indiana

608 F. Supp. 538

In re the SPECIAL, SEPTEMBER 1983, GRAND JURY In the Matter of Lee J. KLEIN (Witness).

No. Misc. 83-199.

United States District Court, S.D. Indiana, Indianapolis Division.

May 9, 1985.

John Daniel Tinder, U.S. Atty., Veta M. Carney, Asst. U.S. Atty., Indianapolis, Ind., for the U.S.

John H. Weston, Beverly Hills, Cal., for Lee J. Klein.

Robert Eugene Smith, Encino, Cal., for Harry V. Mohney.

James H. Voyles, Dennis E. Zahn, Indianapolis, Ind., for Burton H. Gorelick.

MEMORANDUM

DILLIN, District Judge.

The witness, Lee J. Klein (hereafter Movant) has moved for a reconsideration of this Court's Order of March 1, 1985. Although several issues were considered by this Court in the March 1, 1985 Order, the Movant seeks reconsideration of only three issues. The Movant seeks to quash Subpoena 83-199-VMC-01-60, alleging that compliance therewith would violate the attorney-client relationship as protected under the Sixth Amendment to the United States Constitution and would violate the attorney-client privilege. The Movant also asserts that the subpoena is overbroad and oppressive in violation of the Fourth Amendment to the United States Constitution, Rule 45(b), F.R.Civ.P., and Rule 17(c), F.R.Crim.P.

The Movant is an attorney who has represented and continues to represent Harry V. Mohney and Burton H. Gorelick in various matters including tax, estate planning, business or financial, criminal, and domestic matters. The Movant's clients have been "targetted" by the Special September, 1983 grand jury relating to possible tax, arson, and RICO offenses. The Movant has been subpoenaed by this Special grand jury to testify and to produce "any and all documents relating to business and/or financial transactions involving, in any manner whatsoever, directly or indirectly, Harry V. Mohney and/or Burton H. Gorelick."

A hearing was held on the Movant's motion for reconsideration on March 12, 1985. The Movant's clients, Mohney and Gorelick, were permitted to intervene in this matter and fully participate in the hearing. Also on that date, the United States Attorney presented certain additional evidence to the Court in camera relevant to Movant's motion. The issues raised by the Movant will be considered separately.

1. The Attorney-Client Relationship

The Movant initially asserts that the attorney-client relationship is entitled to protection under the Sixth Amendment to the United States Constitution against interference by a grand jury investigation at least to the extent that the government must make a preliminary showing of relevance and need before compelling an attorney to appear before a grand jury in matters relating to his client. To support his argument, the Movant relies on the rationale of the Fourth Circuit Court of Appeals in In re Special Grand Jury No. 81-1 (Harvey), 676 F.2d 1005, vacated on rehearing when witness became a fugitive, 697 F.2d 112 (4th Cir. en banc 1982). The court in Harvey found that although the right to assistance of counsel under the Sixth Amendment does not attach at the grand jury stage, a grand jury witness has a substantial interest in continuing to receive assistance from counsel who was retained for the purpose of the grand jury investigation. Id. at 1010. The court noted that when a grand jury witness's attorney is subpoenaed to appear before the grand jury, a conflict of interest may arise, a wedge may be driven between the attorney and client which may destroy the attorney-client relationship, and there may be a chilling effect on truthful communications from the client to his attorney. Id. at 1009. To protect the interest of the witness in preserving the attorney-client relationship the court determined that the government must make a preliminary showing of the proper purpose of the grand jury investigation, the relevance of the evidence sought to that purpose, and an important need for such evidence. Id. at 1012.

In determining that a preliminary showing of proper purpose, relevancy, and need was required, the Harvey court opined that imposing this requirement was within its supervisory powers over grand jury proceedings and found that this requirement would not substantially interfere with the effectiveness of the grand jury in investigating criminal activities. Id. at 1012. Other courts, however, have disagreed with this rationale. In re Grand Jury Proceeding (Schofield), 721 F.2d 1221, 1222 n. 1 (9th Cir.1983) (court rejected Harvey because requiring a preliminary showing of relevance or need would conflict with Ninth Circuit law narrowly construing the supervisory power of district courts over grand juries); In re Grand Jury Proceedings in Matter of Freeman, 708 F.2d 1571, 1575 (11th Cir.1983) (court rejected Harvey because requiring a preliminary showing of relevance or need would improperly impose restrictions upon the grand jury's broad investigative powers as recognized in the Eleventh Circuit).

Similarly, the Harvey rationale is inconsistent with the law in the Seventh Circuit. Under the law in this circuit the power of the district courts to supervise grand jury proceedings is narrowly construed, United States v. Udziela, 671 F.2d 995 (7th Cir.), cert. denied, 457 U.S. 1135, 102 S.Ct. 2964, 73 L.Ed.2d 1353 (1982), and the investigative powers of the grand jury are found to be necessarily broad to accommodate the grand jury's "dual function of determining if there is probable cause to believe that a crime has been committed and of protecting citizens against unfounded criminal prosecutions." Branzburg v. Hayes, 408 U.S. 665, 686-87, 92 S.Ct. 2646, 2659, 33 L.Ed.2d 626 (1972); Matter of Walsh, 623 F.2d 489, 492 (7th Cir.), cert. denied, 449 U.S. 994, 101 S.Ct. 531, 66 L.Ed.2d 291 (1980); Matter of Special February 1975 Grand Jury, 565 F.2d 407 (7th Cir.1977); United States v. Alewelt, 532 F.2d 1165 (7th Cir.), cert. denied, 429 U.S. 840, 97 S.Ct. 114, 50 L.Ed.2d 109 (1976).

The grand jury's broad powers, however, are not without limitations. Grand jury subpoenas are subject to judicial scrutiny for reasonableness and are subject to the exertion of "a constitutional, common-law, or statutory privilege." United States v. Dionisio, 410 U.S. 1, 9, 93 S.Ct. 764, 769, 35 L.Ed.2d 67, 77 (1973); see also Matter of Walsh, supra (privilege); United States v. Alewelt, supra (reasonableness).

The Seventh Circuit Court of Appeals had an opportunity to balance the interests of a grand jury witness whose attorney was subpoenaed to appear before the grand jury against the interests of the grand jury in investigating criminal activities in Matter of Walsh, supra. The court found that the grand jury is subject to judicial supervision and that grand jury subpoenas are subject to the exertion of a privilege, but that no preliminary showing of need was required. Id. at 493. The court held that there was no privilege against appearing before a grand jury pursuant to a subpoena and that the exertion of a privilege must be made on a documentby-document or question-by-question basis. Id.

Although the court in Walsh focused on the attorney-client privilege, the United States District Court for the Eastern District of Wisconsin considered the reasonableness of a subpoena directed to a grand jury witness's attorney in In re Grand Jury Proceedings of June 16, 1981, 519 F.Supp. 791 (1981).

The subpoenaed attorney before Judge Gordon of the Eastern District of Wisconsin argued that enforcement of the grand jury subpoena would violate the attorney-client relationship and would constitute an abuse of the grand jury process. Id. at 792. The attorney relied on two Third Circuit cases, In re Grand Jury Proceedings (Schofield II), 507 F.2d 963 (1975), and In re Grand Jury Proceedings (Schofield I), 486 F.2d 85 (1973) (subsequently relied upon by the Fourth Circuit in Harvey), which required preliminary showings by affidavit of the relevance and propriety of grand jury subpoenas. Id. at 794.

Interpreting the law of the Seventh Circuit, Judge Gordon found that Schofield I and Schofield II were not controlling and that no preliminary showing by affidavit of the relevance of a grand jury subpoena was required. Id. Judge Gordon noted that the Seventh Circuit Court of Appeals had set forth the standard of reasonableness for grand jury subpoenas in United States v. Alewelt, supra, and that "nothing in Alewelt requires the government to support its subpoena with an affidavit." Id. (emphasis in original). The court stated in Alewelt at 1168:

The authority of a grand jury to inquire into violations of criminal law through the use of subpoenas duces tecum is necessarily broad ... and is generally limited only by the requirement that the evidence to be produced cover a reasonable period of time, is relevant to the investigation, and is identified with reasonable particularity.

Additionally, in two cases arising out of the Seventh Circuit, the United States Supreme Court held that no preliminary showing of the reasonableness of a grand jury subpoena is required. United States v. Dionisio, supra; United States v. Mara, 410 U.S. 19, 93 S.Ct. 774, 35 L.Ed.2d 99 (1973). The attempt of the Fourth Circuit Court of Appeals in Harvey, supra, to distinguish Dionisio and Mara by limiting the cases to their precise facts is not persuasive. See Harvey, 676 F.2d at 1011-12. The Supreme Court in Dionisio stated: "Any holding that would saddle a grand jury with minitrials and preliminary showings would assuredly impede its investigation and frustrate the public's interest in the fair and expeditious administration of the criminal laws." 410 U.S. at 17, 93 S.Ct. at 773, 35 L.Ed.2d at 81.

In conclusion, the government is under no obligation to make a preliminary showing of relevance or need when subpoenaing an attorney whose client is a witness before the grand jury in this circuit. This ruling does not leave the attorney-client relationship without protection from unreasonable interference by a...