Grand Jury 87-3 Subpoena Duces Tecum, In re
| Decision Date | 12 December 1989 |
| Docket Number | 88-5620,Nos. 88-5619,s. 88-5619 |
| Citation | 884 F.2d 772 |
| Parties | In re GRAND JURY 87-3 SUBPOENA DUCES TECUM. UNITED STATES of America, Plaintiff-Appellee, v. UNDER SEAL, Defendant-Appellant. In re GRAND JURY 87-4 SUBPOENA DUCES TECUM. UNITED STATES of America, Plaintiff-Appellee, v. UNDER SEAL, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Herald Price Fahringer (Lipsitz, Green, Fahringer, Roll, Schuller & James on brief); Ralph J. Schwarz, Jr., (Gerald F. Treanor, Jr., Venable, Baetjer & Howard on brief), for defendant-appellant.
Bradford Russell Clark, Sp. Asst. U.S. Atty. (Henry E. Hudson, U.S. Atty., William G. Otis, Lawrence J. Leiser, Asst. U.S. Attys.; Janis Kockritz, Sp. Atty., Crim. Div., U.S. Dept. of Justice, on brief), for plaintiff-appellee.
Before ERVIN, Chief Judge, and PHILLIPS and WILKINSON, Circuit Judges.
These cases concern the question of whether subpoenas duces tecum which seek the production of certain corporate records as well as video tapes presumptively protected by the first amendment meet the relevancy, admissibility, specificity and necessity requirements of Fed.Rule Crim.Pro. 17(c). We affirm the district court's refusal to quash the subpoena issued to Model Magazine Distributors, requesting the company's corporate records. We find, however, that the government failed to demonstrate the relevance of either the corporate records requested from R. Enterprises, Inc. and MFR Court Street Books, Inc. or of the 193 named video tapes requested from Model Magazine. The government also failed to offer any evidence showing that the subpoena was a necessary tool for obtaining copies of the video tapes. For these reasons we reverse the district court's refusal to quash the subpoenas issued to R. Enterprises and MFR Court Street Books. We also remand the motion to quash the subpoena issued to Model Magazine requesting copies of the 193 video tapes, for further inquiry into both the relevancy of these tapes and the necessity of employing a subpoena duces tecum to obtain them.
These cases arise on a motion to stay a contempt order. The parties addressed the merits of the appeal in their briefs and oral arguments. We therefore decide the issues before us on the merits, rather than limiting our consideration to the request for a stay. Appeal of a civil contempt order is proper in this context. See United States v. Ryan, 402 U.S. 530, 532, 91 S.Ct. 1580, 1582, 29 L.Ed.2d 85 (1971); Cobbledick v. United States, 309 U.S. 323, 328, 60 S.Ct. 540, 542, 84 L.Ed. 783 (1940).
A party who chooses to subject himself to the risk of fines and imprisonment due to contempt can contest the validity of a subpoena in the role of contemner. If the subpoena is even partially bad, the contempt conviction should be reversed. See Bowman Dairy Co. v. United States, 341 U.S. 214, 221, 71 S.Ct. 675, 679, 95 L.Ed. 879 (1951).
The subpoena duces tecum at issue arose out of a federal grand jury investigation in Virginia concerning the distribution of obscene materials. Subpoenas duces tecum were originally served on Model Distributors and Metro Video Distributors in October, 1986. Those subpoenas requested certain corporate records, as well as "one copy of any video tape cassette, 8 mm film or 16 mm film" that depicted specified types of conduct, which would render the films legally obscene. The subpoenas also demanded documents related to any tapes involving the listed categories of sexual activity. Both Model and Metro Video refused to comply with the subpoenas arguing that they were "unreasonable and oppressive," in violation of Fed.R.Crim.Pro. 17(c). The district court denied the companies' motions to quash the subpoenas, and found both parties in contempt.
On appeal, this court reversed the district court's findings as to reasonableness and burdensomeness under Rule 17(c), and quashed the subpoenas. In re Grand Jury Subpoena: Subpoena Duces Tecum, 829 F.2d 1291 (4th Cir.1987), reh'g denied, 844 F.2d 202 (1988) ("Model I"). We found that the subpoenas did not meet the requirements of Rule 17(c) because:
The presumptively protected materials they seek are otherwise procurable, and in a less intrusive manner; the specificity of the subpoenas is illusory, since the categories described do not refer to particular tapes; as a result, the corporations before us would be required to perform burdensome searches and would be at risk for failing to fulfill vague requirements; in sum, the government appears to be engaging in a paradigmatic "fishing expedition."
Following our decision in Model I, the grand jury issued new subpoenas to Model, R. Enterprises 1, and MFR Court Street Books, Inc. on April 22, 1988. All three of these corporations are owned and operated by Martin E. Rothstein. When served with the subpoenas for these three corporations, Mr. Rothstein told an FBI agent that the entities were "all the same thing, I am the president of all three."
Model partially complied with the April 22 subpoena, but refused to produce "standard" corporate books and records (i.e. the general ledger, the disbursements journal, and banking records). The company based its refusal to comply fully on the grounds that it was no longer doing business in Virginia, and that the documents were not relative to a grand jury investigation in Virginia.
On June 2, 1988, the grand jury issued two new subpoenas to Model. The first again requested specific business records, and the second sought one copy of each of the 193 video cassettes Model had shipped to retailers in the Eastern District of Virginia. The 193 titles had been disclosed in Model's invoices supplied pursuant to the 1986 subpoena.
All three companies eventually moved to quash the various subpoenas. On June 17, 1988 the district court denied Model's motion to quash the subpoena requesting the 193 video tapes. The court found the subpoena satisfied the specificity standards suggested in Model I, and that the tapes were relevant to the government's investigation. The district court also denied Model's motion to quash the business records subpoenas issued to the company, and ordered the production of those records. The court found that those subpoenas were not overbroad.
On July 8, 1988 the district court denied R. Enterprises, Inc.'s motion to quash the records subpoena issued to it. The trial judge found that the subpoena was not overbroad, and that given Rothstein's admission that the three companies were the "same thing," there existed a sufficient connection with Virginia to warrant further grand jury investigation.
On August 22, 1988 the district court ordered MFR to comply with the records subpoena issued to it. The court found that Model, MFR, and R. Enterprises were one and the same, and that there was evidence that at least one of the entities, Model, had shipped material into the Eastern District of Virginia. Therefore, the lower court reasoned, the material sought from MFR was relevant. The court also found that the subpoenas were not indefinite or burdensome, and that they did not impermissibly chill first amendment rights.
On August 18, 1988 the district court found Model, MFR, and R. Enterprises, Inc. in contempt for failure to comply with orders to produce the subpoenaed materials. The court fined each company $500.00 per day, but stayed imposition of the fines until August 22, 1988, pending appeal. This court subsequently stayed the district court's contempt order retroactive to its date of entry, pending this appeal.
The subpoenas duces tecum challenged in this case were issued pursuant to Fed.R.Crim.Pro. 17(c), which provides:
A subpoena may also command the person to whom it is directed to produce the books, papers, documents or other objects designated therein. The court on motion made promptly may quash or modify the subpoena if compliance would be unreasonable or oppressive. The court may direct that books, papers, documents or objects designated in the subpoena be produced before the court at a time prior to the trial or prior to the time when they are to be offered in evidence and may upon their production permit [them] to be inspected by the parties and their attorneys.
In United States v. Nixon, 418 U.S. 683, 94 S.Ct. 3090, 41 L.Ed.2d 1039 (1974), the Supreme Court held that a subpoena issued pursuant to Rule 17(c) is not "unreasonable or oppressive" if the party seeking its enforcement can demonstrate:
(1) that the documents are evidentiary and relevant; (2) that they are not otherwise procurable reasonably in advance of trial by exercise of due diligence; (3) that the party cannot properly prepare for trial without such production and inspection in advance of trial and that the failure to obtain such inspection may tend unreasonably to delay the trial; and (4) that the application is made in good faith and is not intended as a general "fishing expedition."
418 U.S. at 699-700, 94 S.Ct. at 3103. 2 Against this background, the court concluded, the government, "in order to carry [its] burden, must clear three hurdles: (1) relevancy; (2) admissibility; (3) specificity." 418 U.S. at 700, 94 S.Ct. at 3103.
The determination of whether a subpoena duces tecum issued under Rule 17(c) is either unreasonable or oppressive is "committed to the sound discretion of the trial court." Nixon, supra, at 702, 94 S.Ct. at 3105. Thus, an appellate court will not ordinarily disturb a finding that a subpoena complies with Rule 17(c) unless it determines that the trial court's finding was arbitrary, or without support in the record. Id.
Our only concern with respect to the business records requested from Model, R. Enterprises, and MFR is the relevancy of those documents to the grand jury's investigation.
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