856 F.2d 619 (4th Cir. 1988), 87-3648, In re Martin Marietta Corp.

Docket Nº:87-3648.
Citation:856 F.2d 619
Party Name:In re MARTIN MARIETTA CORPORATION, Appellant. UNITED STATES of America, Plaintiff, v. William C. POLLARD, Defendant-Appellee.
Case Date:September 06, 1988
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit

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856 F.2d 619 (4th Cir. 1988)


UNITED STATES of America, Plaintiff,


William C. POLLARD, Defendant-Appellee.

No. 87-3648.

United States Court of Appeals, Fourth Circuit

September 6, 1988

Argued April 8, 1988.

Rehearing and Rehearing In Banc Denied Oct. 14, 1988.

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Brian Christian Elmer (Richard L. Beizer, Alan W.H. Gourley, Pauline E. Waschek, Crowell & Moring, Washington, D.C., George Beall, Miles & Stockbridge, Baltimore, Md., Frank H. Menaker, Jr., Jay A. Brozost, Martin Marietta Corp., Bethesda, Md., on brief), for appellant.

Robert Harley Bear (James S. Maxwell, Maxwell & Bear, Washington, D.C., on brief), for defendant-appellee.

Before WINTER, Chief Judge, and MURNAGHAN and ERVIN, Circuit Judges.

MURNAGHAN, Circuit Judge:

William C. Pollard, a former employee of Martin Marietta Corporation (Martin Marietta), is under indictment, returned April 7, 1987, by a grand jury of the District of Maryland on three counts. Count I alleges a conspiracy to defraud the Department of Defense (DOD), Counts II and III allege mail fraud. Pollard is charged with operating a scheme to characterize improperly travel cost rebates paid by travel agencies PTI and its subsidiary IVI (companies independent of Martin Marietta) to Maxim, a subsidiary of Martin Marietta, as fees rather than credits against travel costs. The overall effect was that Martin Marietta could overstate the costs for which it received reimbursement by the DOD.

On June 1, 1987, Pollard, under Fed.R.Crim.P. 17(c), subpoenaed Martin Marietta for the production of fifteen categories of documents. On June 12, 1987, Martin Marietta moved to quash. On July 2, 1987, the district court denied the motion to quash but also ruled that the subpoena was overly broad. The court limited the subpoena to uncontested items until the defense established

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a need for particularized items. On September 9, 1987, Pollard limited the scope of the contested items to six categories. At a hearing held the next day the district court allowed Martin Marietta several weeks to determine what documents it would voluntarily produce. On October 1, 1987, Martin Marietta agreed that it would produce the documents responsive to two of the six categories, would produce some of the documents requested under a third category, and had no documents requested under a fourth category. It refused to produce any items in the other two categories. Thus, three categories of documents remained in dispute. They were:

  1. Audit Papers. Martin Marietta's corporate internal audit reports, workpapers and related supporting documentation (including internal memoranda and internal and externalcorrespondence), covering the audits of Martin Marietta's subsidiary Maxim, and its relationship to travel companies IVI and PTI. [This is the category for which Martin Marietta made selected production.]

  2. Witness Statements. Notes, transcripts and electronic recordings of interviews with and statements by William Pollard, Richard Westfall, Gregory Levins, John Rayburn, Peter Warren and James Simpson concerning the relationship of Martin Marietta, Maxim, IVI and PTI.

  3. Administrative Settlement Agreement Materials. All correspondence and notes of unwritten communciations to or from Martin Marietta and the United States Government related to the Administrative Settlement Agreement between the company and the Defense Logistics Agency executed by the company on January 31, 1987.

On October 15, 1987, Pollard moved for an order to compel production of the items withheld by Martin Marietta. At Martin Marietta's request, the court committed itself to a two-step procedure: first, to require production of the documents at issue in camera; and second, to give the company another opportunity, after the court reviewed the documents, to argue against their production to Pollard. In the course of that procedure, Martin Marietta acknowledged that portions of some documents it sought to withhold had been earlier quoted in disclosures made by it to the Government, either or both the United States Attorney and the Defense Logistics Agency, part of the Department of Defense.

The district court ordered production of the documents at issue, with the exception of audit papers that had already been made available to the defense, and certain documents relating to the Administrative Settlement Agreement that the court determined after its in camera review to be irrelevant. In its accompanying memorandum, the court described its basis for ordering the disclosure of the materials by category. A contempt order was issued when Martin Marietta failed to comply with the order of production.

Rule 17(c) implements the Sixth Amendment guarantee that an accused have compulsory process to secure evidence in his favor. California v. Trombetta, 467 U.S. 479, 485, 104 S.Ct. 2528, 2532, 81 L.Ed.2d 413 (1984). Enforcement of a Rule 17(c) subpoena is governed by the standards established in United States v. Nixon, 418 U.S. 683, 94 S.Ct. 3090, 41 L.Ed.2d 1039 (1974). A party seeking pretrial production of documents must demonstrate (1) relevancy, (2) admissibility, and (3) specificity with respect to the documents. Id. at 700, 94 S.Ct. at 3103.

The district court correctly noted the Nixon requirements and then found that Pollard met them. Martin Marietta argues that the court misapplied the Nixon requirements. Its chief objection is that it thinks that the district court misapplied the admissibility criterion by improperly using a broad civil discovery standard rather than the narrower criminal evidentiary standard.

Martin Marietta has a heavy burden to meet on appeal.

Enforcement of a pretrial subpoena duces tecum must necessarily be committed to the sound discretion of the trial court since the necessity for the subpoena most often turns upon a determination of

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factual issues. Without a determination of arbitrariness or that the trial court finding was without record support, an appellate court will not ordinarily disturb a finding that the applicant for a subpoena complied with Rule 17(c).

Nixon, 418 U.S. at 702, 94 S.Ct. at 3104 (emphasis in original).

We turn to the three Nixon requirements. While Rule 17(c) is limited to evidentiary materials, that is not to say that the materials subpoenaed must actually be used in evidence. It is only required that a good faith effort be made to obtain evidence. Bowman Dairy Co. v. United States, 341 U.S. 214, 219-20, 71 S.Ct. 675, 678-79, 95 L.Ed. 879 (1951).

All the efforts to obtain...

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