Grand Jury Proceeding, In re

Decision Date31 March 1988
Docket NumberNo. 87-8041,87-8041
Citation842 F.2d 1229
PartiesIn re GRAND JURY PROCEEDING.
CourtU.S. Court of Appeals — Eleventh Circuit

William A. Cohan, Darold W. Killmer, Carl E. Stahl, Jennifer A. Greene, Cohan & Greene, P.C., Denver, Colo., Nicholas A. Lotito, Fierer & Westby, Atlanta, Ga., for appellant.

James E. Fagan, Jr., Asst. U.S. Atty., Atlanta, Ga., for appellee.

Appeal from the United States District Court for the Northern District of Georgia.

Before FAY and KRAVITCH, Circuit Judges, and ATKINS *, Senior District Judge.

KRAVITCH, Circuit Judge:

William and Carolyn Bicket, the National Commodity and Barter Association (NCBA), and the National Commodity Exchange (NCE) appeal from the district court's denial of their motion to quash a grand jury subpoena duces tecum issued to Les Roberts of Roberts & Roberts Brokerage, Inc. Because we conclude that neither the first nor the fourth amendment required the district court to quash the subpoena, we affirm.

I.

NCBA is an association dedicated to limited government, privacy in personal and financial affairs, and the protection of private property. NCBA advocates home education of children, the abolition of the Internal Revenue Service, and a return to the gold standard. It disputes the constitutionality of the Federal Reserve System and many of the federal administrative agencies. NCBA publishes books and newsletters alerting its members to the dangers posed by environmental pollution, unsound currency, and the growth of the federal government.

NCBA also provides its members with various financial services. For example, members can participate in a plan under which NCBA pays legal expenses for IRS audits and criminal tax prosecutions. Most importantly for purposes of this appeal, NCBA operates, through its wing NCE, a service through which members can purchase precious metals and pay bills with a minimum of recordkeeping. Under this plan, appellant William Bicket, the Atlanta area representative of NCBA, receives checks from members to be deposited in an "account" created for them by NCBA. Bicket collects the checks and forwards them to NCBA with forms in the nature of deposit slips. NCBA then disburses funds according to its members' instructions, without any indication that the disbursements are paid from any particular member's account.

Because its members have an aversion to paper currency, NCBA also arranges for their purchase of precious metals. Although NCBA usually writes checks for the commodities from the accounts that it operates for its members, in the transactions directly involved here, Bicket deviated from the customary plan. Bicket sent letters and checks bearing the members' names directly to Roberts & Roberts Brokerage, Inc., of Pensacola, Florida and instructed that brokerage firm to ship gold and silver directly to NCBA members. Roberts & Roberts thus holds records that identify the names and addresses of NCBA members.

The financial system operated by NCBA obviously provides significant opportunities for the evasion of federal tax laws, especially requirements for the reporting of taxable income. On September 15, 1986, a federal grand jury investigating possible criminal violations of the tax laws issued a subpoena duces tecum to Les Roberts, of Roberts & Roberts Brokerage, commanding the production of all records from January 1, 1983 to September 16, 1986 relating to NCBA, NCE, the Bickets, nine other individuals, and a trust. The Bickets, NCBA, and NCE moved in the district court to have the subpoena quashed, arguing that compliance would violate their first amendment right to freedom of expressive association. The movants also argued that the subpoena should be quashed as the fruit of an illegal search and seizure of NCBA's offices in Colorado. The district court denied the motion to quash, 650 F.Supp. 159, and this appeal followed.

II.

We consider first the appellants' fourth amendment argument. According to appellants, the district court should have quashed the subpoena because it was the "fruit of the poisonous tree." In this case, the poisonous tree is a search and seizure at NCBA's Colorado offices that was held unconstitutional by the Tenth Circuit. See Voss v. Bergsgaard, 774 F.2d 402 (10th Cir.1985). NCBA argues that the grand jury subpoena derives from information obtained in that search.

NCBA relies heavily on the venerable case of Silverthorne Lumber Co. v. United States, 251 U.S. 385, 40 S.Ct. 182, 64 L.Ed. 319 (1920). In Silverthorne Lumber, the Supreme Court held that the government could not obtain by subpoena documents which federal marshals had previously seized in violation of the fourth amendment and which the district court had ordered returned to the owners. The Court rejected the government's argument that the fourth amendment prevented the government only from retaining physical possession over the documents, and not from using the information obtained in that search to its advantage. See id. at 391, 40 S.Ct. at 182.

The Supreme Court reexamined Silverthorne Lumber in United States v. Calandra, 414 U.S. 338, 94 S.Ct. 613, 38 L.Ed.2d 561 (1974). Calandra sought to resist a grand jury subpoena requiring him to answer questions based on an allegedly unconstitutional search of his place of business. The Supreme Court rejected Calandra's argument that the exclusionary rule of the fourth amendment should be applied to grand jury proceedings. According to the Court, because of the special nature of grand jury proceedings, the grand jury "has traditionally been allowed to pursue its investigative and accusatorial functions unimpeded by the evidentiary and procedural restrictions applicable to a criminal trial." Id. at 349, 94 S.Ct. at 620. The Court assigned great weight to the "effective and expeditious discharge of the grand jury's duties," id. at 350, 94 S.Ct. at 621, and concluded that the suppression hearings required by the application of the exclusionary rule to grand jury proceedings would unduly impede and delay the grand jury's function. Id. at 349-50, 94 S.Ct. at 621. The Court further noted that the issues raised in suppression hearings had been usually "reserved for trial on the merits," id. at 349, 94 S.Ct. at 621, and that grand jury use of the fruits of an illegal search would not necessarily prevent a criminal defendant actually under indictment from obtaining the suppression of those fruits at trial. Id. at 351, 94 S.Ct. at 621.

The Calandra Court considered the application of Silverthorne Lumber in a lengthy footnote. Id. at 352 n. 8, 94 S.Ct. at 622 n. 8. The Court first noted that Silverthorne Lumber involved defendants who had already been indicted by the grand jury and thus could invoke the exclusionary rule based on their status as criminal defendants. Apparently, the government in Silverthorne Lumber sought to subpoena the documents not to present to the grand jury for use in its accusatorial function, but for use at trial. Id. Second, at the time the government issued its subpoena to the Silverthorne Lumber Company, the district court already had determined that the search and seizure were illegal. Id. Delay of grand jury proceedings by a lengthy suppression hearing thus was unlikely in Silverthorne Lumber, whereas in Calandra the constitutionality of the search and seizure had not been adjudicated before the issuance of the subpoena.

In this case, unlike Calandra, a court already has determined that the "tree" was "poisonous." See Voss v. Bergsgaard, 774 F.2d 402 (10th Cir.1985). Even assuming, without deciding, that this determination by the Tenth Circuit is binding on the parties under the principle of issue preclusion, 1 rendering unnecessary further litigation on the constitutionality of the Colorado search, the logic of Calandra still precludes application of the exclusionary rule. The legality of a search is not the only issue that must be considered at a suppression hearing. The district court still would have to hear and weigh evidence on whether the information underlying the subpoena was actually the fruit of the illegal search, and whether the government had obtained or would have obtained that information from an independent source. See Nix v. Williams, 467 U.S. 431, 104 S.Ct. 2501, 81 L.Ed.2d 377 (1984); Silverthorne Lumber, 251 U.S. at 392, 40 S.Ct. at 183.

Moreover, delay is not the only factor counseling against application of the exclusionary rule to grand jury proceedings. In Calandra, the Supreme Court made clear that "the [exclusionary] rule's prime purpose is to deter future unlawful police conduct and thereby effectuate the guarantee of the Fourth Amendment." 414 U.S. at 347, 94 S.Ct. at 619-20. The application of the exclusionary rule to grand jury proceedings advances that goal only minimally, at best. Because defendants may invoke the exclusionary rule at trial, any extension of the exclusionary rule would deter "only police investigation consciously directed toward the discovery of evidence solely for use in a grand jury investigation." Id. at 351, 94 S.Ct. at 621. Such minimal benefit is clearly outweighed by the cost of depriving the grand jury of relevant evidence. We therefore see no reason to deviate from the principles established in Calandra.

Because we conclude that the district court could not invoke the exclusionary rule to quash the subpoena on fourth amendment grounds, we need not consider the district court's conclusion that the government would have obtained the information underlying the subpoena from independent sources.

III.

Appellants argue that enforcement of the subpoena issued to Roberts would violate their freedom of expressive association. Although we ultimately conclude that the first amendment does not bar enforcement of the subpoena, we must address what the first amendment requires the government to demonstrate in cases such as this one.

To continue reading

Request your trial
42 cases
  • Local 491, Police Officers v. Gwinnett County, Ga
    • United States
    • U.S. District Court — Northern District of Georgia
    • May 7, 2007
    ...Amendment challenge based on the chilling effect of compelled disclosure of protected political activity. See In re Grand Jury Proceeding, 842 F.2d 1229, 1235-36 (11th Cir. 1988). The Supreme Court has indicated on several occasions that some evidence of a chilling effect is required. In NA......
  • Pleasant v. Lovell
    • United States
    • U.S. Court of Appeals — Tenth Circuit
    • May 16, 1989
    ...although commercial activity might make the challenged state action less disruptive of the political message. In re Grand Jury Proceeding, 842 F.2d 1229, 1235 (11th Cir.1988). State compelled disclosure of the identity of group members has important first amendment implications. The reason ......
  • NCBA/NCE v. US
    • United States
    • U.S. District Court — District of Colorado
    • October 22, 1993
    ...U.S. v. Stelten, 867 F.2d 446 (8th Cir.1989), cert. denied, 493 U.S. 828, 110 S.Ct. 95, 107 L.Ed.2d 59 (1989); In re Grand Jury Proceeding, 842 F.2d 1229 (11th Cir.1988); Voss v. Bergsgaard, 774 F.2d 402 (10th Cir.1985); Heinold Hog Market, Inc. v. McCoy, 700 F.2d 611 (10th Cir. 1983); U.S.......
  • Tattered Cover, Inc. v. City of Thornton
    • United States
    • Colorado Supreme Court
    • April 8, 2002
    ...United States, 951 F.2d 1172, 1174 (10th Cir.1991); United States v. Comley, 890 F.2d 539, 544 (1st Cir. 1989); In re Grand Jury Proceeding, 842 F.2d 1229, 1233 (11th Cir.1988); Brock v. Local 375, Plumbers Int'l Union, 860 F.2d 346, 350 (9th Cir.1988); In re Grand Jury Proceedings, 776 F.2......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT