Grand Jury Proceedings, In re

• Decision Date: 15 July 1988
• Docket Number: No. 87-2215,87-2215
• Parties: In re GRAND JURY PROCEEDINGS.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 860

851 F.2d 860

57 USLW 2073

In re GRAND JURY PROCEEDINGS.

No. 87-2215.

United States Court of Appeals, Sixth Circuit.

Argued April 25, 1988.

Decided July 15, 1988.

James K. Robinson (argued), Mark R. Werder, Detroit, Mich., for defendant-appellant.

Roy C. Hayes (argued), Kathleen Nesi, Lynn A. Helland, U.S. Atty., Detroit, Mich., for plaintiff-appellee.

Before MERRITT and KENNEDY, Circuit Judges, and CONTIE, Senior Circuit Judge.

MERRITT, Circuit Judge.

The issues presented by this appeal arose when the government sought subsequent access for civil purposes to documentary materials and other evidence accumulated in the course of a now terminated grand jury investigation. In particular, we are faced with interpreting the phrase "matters occurring before the grand jury" which occurs in the text of Federal Rule of Criminal Procedure 6(e). ¹ Holding that a variety of materials were not "matters occurring before the grand jury," the District Court held that rule 6(e) did not apply to any of the materials. The Court allowed the United States Customs Service access to the materials without engaging in the ordinary rule 6(e) inquiry whether the contemplated use was "preliminar[y] to or in connection with a judicial proceeding" under United States v. Baggott, 463 U.S. 476, 103 S.Ct. 3164, 77 L.Ed.2d 785 (1983), or whether the Customs Service had satisfied the "particularized need" showing required by Douglas Oil Co. v. Petrol Stops Northwest, 441 U.S. 211, 99 S.Ct. 1667, 60 L.Ed.2d 156 (1979); United States v. Sells Engineering, Inc., 463 U.S. 418, 103 S.Ct. 3133, 77 L.Ed.2d 743 (1983), and progeny. The primary issue on appeal is whether confidential business records, the production of which the grand jury compelled by subpoena, are "matters occurring before the grand jury" and therefore subject to a rule 6(e) analysis. We conclude that the District Court did not address this issue properly, and we therefore reverse and remand the case to the District Court for further proceedings under rule 6(e).

I.

A large American company ² was under grand jury investigation in the early 1980's for suspected criminal concealment of its alleged violation of Customs regulations that sought to prohibit "dumping" of foreign-made commodities by forbidding importation of certain products below a specified "trigger" price. The criminal investigation focused on suspected violations of 18 U.S.C. Secs. 542 and 1001. The investigation terminated with a prosecutorial decision not to seek indictments.

Shortly thereafter, the Company's lawyers wrote to the prosecutors asking that they be notified if the Government would be seeking to use for civil purposes any materials provided by the Company to the grand jury either under subpoena or voluntarily in an effort to persuade the prosecutors that no indictable behavior had occurred. The Government responded that it had already obtained the materials ex parte. The Company then moved the District Court in which the grand jury sat to vacate the order that authorized the turnover. The Government and the Company agreed to a stipulation that, pending resolution of the Government's entitlement to them, there would be no further disclosure or use of the contested materials "unless [they were] independently obtained by the Government pursuant to separate proceedings."

In the initial ex parte proceeding the District Court had signed a brief order identical to that submitted by the government authorizing access to the materials by Treasury Department lawyers and employees. The application for disclosure sought "those documents subpoenaed by the grand jury" and then enumerated a variety of documentary evidence that had been obtained by four separate subpoenas issued by the grand jury in October 1984, January 1985, and April 1985.

The parties agree that the materials sought should be grouped into five conceptual categories:

1. Documents prepared by the Company for purposes other than the grand jury investigation.

2. The list of persons who were involved in the commodity transactions. The government conceded below that this listing constituted a "testimonial response" by the Company.

3. Notes prepared by agents of the grand jury that summarize and analyze all the evidence, principally the materials enumerated in Category One.

4. The memorandum of interview of a witness under subpoena by the grand jury. The interview was conducted before his testimony.

5. Materials arguably protected by the attorney-client privilege. The Company waived the privilege with respect to certain documents submitted to the grand jury in order to demonstrate its lack of criminal intent, and now apparently seeks to limit its waiver to only these documents and only for their use by the grand jury. The Government acknowledged below that these materials should not "be released until the claim of privilege is resolved" even though they were not, in the Government's view, "matters occurring before the grand jury."

After a hearing in which it heard arguments from counsel for the Government and the Company, the District Court issued a second sealed opinion in which it explained that its earlier ruling had been grounded upon a finding that none of the materials sought could be "properly classified as 'matters occurring before the grand jury' " because

the documents in question, as described by the parties, do not reveal and would not aid Customs in determining what transpired in the grand jury room. Neither does the Court find that they were being sought to achieve that purpose. Rather, the Customs Service's interest is in the contents of the documents themselves.

To support this analysis, the District Court relied principally on United States v. Interstate Dress Carriers, Inc., 280 F.2d 52 (2d Cir.1960), and progeny. It simply did not mention or discuss either of the two categories that the Government had conceded required special attention, Categories Two (testimonial response) and Five (attorney-client privilege).

II.

Neither the Supreme Court nor this Court has addressed the issue of what constitutes "matters occurring before the grand jury" for purposes of rule 6(e). It is common ground that testimony before a grand jury is always such a "matter"; the dispute is over whether subpoenaed documents should be so considered--particularly the documents in Category One which were originally prepared for business purposes, not grand jury purposes. In In re John Doe Grand Jury Proceedings, 537 F.Supp. 1038 (D.R.I.1982), Chief Judge Pettine summarized well the several, inconsistent approaches that other courts have taken to the problem whether disclosure of documents subpoenaed by a grand jury is governed by rule 6(e) secrecy provisions. He grouped them as follows:

(1) A per se rule that subpoenaed documents are never "matters occurring before the grand jury" and thus not subject to the rule.

(2) A virtually per se rule similar to the first approach, holding that subpoenaed documents are not subject to the rule so long as they are sought for their own sake--for their "intrinsic value"--rather than to learn what transpired before the grand jury. This is the "purpose" approach attributed to Interstate Dress Carriers that was embraced by the District Court.

(3) An opposite per se rule that subpoenaed documents always are subject to the rule. This approach usually is accompanied by a correlative principle that a lesser showing of "particularized need" under Douglas Oil is necessary for documents than for testimony.

(4) An approach which calls for an individualized determination whether a given disclosure will, when reasonably considered in the context of the particular grand jury inquiry, tend to reveal some secret aspect of the grand jury investigation. This factual analysis will turn not on the purpose of the party seeking disclosure but rather on the effect of disclosure. This general "effect" approach has been employed in the Third, Seventh, and D.C. Circuits.

In deciding what the proper approach to this issue should be, our overriding concern must be faithfulness to the requirements of rule 6(e). The rule's plain language does not give a clear answer. But resort to its policies and history convinces us that we should be very reluctant to permit wholesale access to grand jury evidence without the safeguard of judicial supervision.

The general policies that underlie grand jury secrecy are:

(1) To prevent the escape of those whose indictment may be contemplated; (2) to insure the utmost freedom to the grand jury in its deliberations, and to prevent persons subject to indictment or their friends from importuning the grand jurors; (3) to prevent subornation of perjury or tampering with the witnesses who may testify before [the] grand jury and later appear at the trial of those indicted by it; (4) to encourage free and untrammeled disclosure by persons who have information with respect to the commission of crimes; (5) to protect [the] innocent accused who is exonerated from disclosure of the fact that he has been under investigation, and from the expense of standing trial where there was no probability of guilt.

United States v. Proctor & Gamble Co., 356 U.S. 677, 681 n. 6, 78 S.Ct. 983, 986, 2 L.Ed.2d 1077 (1958). In both United States v. Sells Engineering, 463 U.S. at 432-33, 103 S.Ct. at 3142-43, and in United States v. John Doe, Inc. I, 481 U.S. 102, 107 S.Ct. 1656, 1663-64, 95 L.Ed.2d 94 (1987), the majority of the Court identified three types of dangers involved in "disclosure of grand jury information to Government attorneys for use related to civil proceedings":

1. Disclosure increases the risk of inadvertent or illegal further release of information to unauthorized persons and thus may threaten the willingness of witnesses to testify fully and candidly;

2. A threat to the integrity of the grand jury process itself if there is a tendency for the government to abuse the grand jury process; and

3. Possible...