Grand Jury Proceedings, In re

• Decision Date: 27 October 1983
• Docket Number: No. 83-1106,83-1106
• Citation: 716 F.2d 493
• Parties: In re GRAND JURY PROCEEDINGS. Appeal of Robert E. YOUNG.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 493

716 F.2d 493

In re GRAND JURY PROCEEDINGS Appeal of Robert E. YOUNG.

No. 83-1106.

United States Court of Appeals Eighth Circuit.

Submitted June 16, 1983.

Decided Aug. 26, 1983.

Rehearing and Rehearing En Banc Denied Oct. 27, 1983.

Rodney S. Webb, U.S. Atty., Gary Annear, First Asst. U.S. Atty., Fargo, N.D., for appellee.

Frank T. Knox, Frank L. Racek, Fargo, N.D., for appellant.

Before HEANEY, Circuit Judge, GIBSON and ROSENN, ^* Senior Circuit judges.

ROSENN, Senior Circuit Judge.

This appeal raises several nettlesome questions pertaining to appellant's right to regain property seized pursuant to a search warrant that was issued as part of a federal grand jury investigation of his business affairs. Appellant Robert Young operates five separate businesses, one of which is the Bob Young Bonding Company, an unincorporated bail bonding business in Fargo, North Dakota. In the course of a joint investigation by the Federal Bureau of Investigation (FBI) and the Internal Revenue Service (IRS) of Young's activities, the FBI obtained a search warrant for the premises of his bail bonding business and executed the warrant by seizing sixteen boxes of various records. Young moved in the United States District Court under Fed.R.Crim.P. 41(e) ¹ for the return of the property seized, claiming that the warrant authorized a general exploratory search in contravention of the fourth amendment and that the supporting affidavit for the warrant was constitutionally defective. The district court rejected each of Young's constitutional arguments and he appealed. ² We reverse.

I.

Following receipt in 1981 of information that the appellant had engaged in criminal misconduct in his entrepreneurial activities, the FBI and the IRS in 1982 engaged in a joint investigation and information gathering to determine whether Young had violated any federal law. One facet of the investigation focused on Young's bail bonding dealings between criminal defendants who were clients of the Bob Young Bonding Co. and two surety companies, First Heartland Surety and Casualty Insurance Co. and Minnesota Trust Co., for which Young purportedly acted pursuant to powers of attorney. The Government interviewed numerous clients of the Bob Young Bonding Co., as well as other persons, and subpoenaed records of banks and the two surety companies. The records of these bonding surety companies indicated that certain bonds issued by appellant Young had been marked "void." This aroused the Government's curiosity as to whether the bonds had genuinely been voided or whether appellant Young had actually collected premiums for the bonds that he improperly appropriated to his own use. Because Young refused the request of investigating agents to produce voluntarily records of his bonding business, federal agents sought a warrant to search the office of Young's bail bonding business in Fargo. A United States magistrate issued the warrant on November 15, 1982, on the basis of an affidavit by FBI Agent Brent Frost. Federal agents executing the warrant seized the sixteen boxes of records and removed them to the offices of the IRS for storage. A large portion of these records are still in the Government's possession, although the Government has allowed Young access to these records from time to time.

Young moved in the district court for the return of the records, contending that the search and seizure violated his fourth amendment rights because the affidavit in support of the search warrant was constitutionally insufficient and because the warrant authorized a general exploratory search of all his bail bonding records for the past seven years. The district court denied the motion, holding that the affidavit adequately established probable cause for the issuance of the warrant and that under the circumstances of the case, the warrant did not authorize a general search. We disagree.

II.

The threshold question that we must examine, a question not raised by the parties but on which we have requested supplemental briefing, is whether the district court's ruling on the Rule 41(e) motion for the return of the records is an appealable order. DiBella v. United States, 369 U.S. 121, 82 S.Ct. 654, 7 L.Ed.2d 614 (1962), which sets forth the general guiding principle, involved two criminal defendants who, subsequent to their arrest, filed motions under the predecessor to Rule 41(e), seeking the return of property that had been seized from them and its suppression as evidence. While the motions were pending, each defendant was indicted. The Supreme Court held that the district court orders denying the Rule 41 motions were interlocutory and hence unappealable, explaining that to permit such interlocutory appeal of a suppression motion would disrupt the ongoing criminal proceedings.

Presentations before a United States Commissioner, as well as before a grand jury, are parts of the federal prosecutorial system leading to a criminal trial. Orders granting or denying suppression in the wake of such proceedings are truly interlocutory, for the criminal trial is then fairly in train. When at the time of ruling there is outstanding a complaint, or a detention or release on bail following arrest, or an arraignment, information, or indictment--in each such case the order on a suppression motion must be treated as "but a step in the criminal case preliminary to the trial thereof." Only if the motion is solely for return of property and is in no way tied to a criminal prosecution in esse against the movant can the proceedings be regarded as independent.

Id. at 131-32, 82 S.Ct. at 660-61 (citations omitted).

In interpreting the teaching of DiBella, most courts have focused on the last sentence of this passage. See, e.g., Imperial Distributors, Inc. v. United States, 617 F.2d 892, 895 (1st Cir.), cert. denied, 449 U.S. 891, 101 S.Ct. 249, 66 L.Ed.2d 116 (1980); United States v. One Residence and Attached Garage, etc., 603 F.2d 1231, 1238 (7th Cir.1979) (Wood, J., dissenting). This sentence appears to set forth a two-part test for appealability of Rule 41(e) motions. First, the motion must be "solely for return of property." Second, the motion cannot be "tied to a criminal prosecution in esse against the movant." The instant case presents a close question with respect to each of these requirements.

As Rule 41(e) is now written, no motion under that Rule could ever literally comply with the requirement that the motion be "solely for return of property." This is because under the Rule any motion for the return of property is automatically treated as a suppression motion as well. Once the property is ordered restored, the property becomes inadmissible as evidence in judicial proceedings. Accordingly, a number of courts have interpreted the word "solely" in the DiBella opinion as contemplating an inquiry into whether the "primary purpose" or "essential character" of the Rule 41(e) motion was to obtain the return of the items seized or to obtain a suppression order. See Imperial Distributors, Inc. v. United States, supra, 617 F.2d at 895; United States v. Premises Known as 608 Taylor Ave., 584 F.2d 1297, 1300 (3d Cir.1978).

In the instant case, we believe Young's motion primarily sought the return of his documents. It is important to note that the federal agents took some sixteen boxes of his records pertaining to his business activities between 1976 and the date of the seizure. This involved a considerable interference with Young's ability to carry on his business affairs. The affidavit in support of his motion for return asserts that the sixteen boxes of seized files "are vital to the operation of his business" and "are needed on a day by day basis." ³ Although he undoubtedly also wished to have the records suppressed, the main thrust of his motion was to obtain possession of the documents.

The second requirement of DiBella --that the motion not relate to an existing criminal prosecution--is less troublesome here. Although the documents were obtained from Young in connection with an ongoing grand jury investigation, no formal charges have yet been filed. In DiBella the Supreme Court suggested that the Rule 41(e) motion is deemed part of a criminal prosecution only if "at the time of ruling there is outstanding a complaint, or a detention or release on bail following arrest, or an arraignment, information, or indictment." 369 U.S. at 131, 82 S.Ct. at 660. See also United States v. Ryan, 402 U.S. 530, 533, 91 S.Ct. 1580, 1582, 29 L.Ed.2d 85 (1971) ("review is available immediately of a denial of a motion for the return of seized property, where there is no criminal prosecution pending against the movant").

The circuits have divided on the specific question whether a Rule 41(e) motion is appealable when the moving party has not yet been charged or indicted. In a case decided thirteen years ago, this court held that a motion for relief under Fed.R.Crim.P. 41(e) was independent of any criminal prosecution in esse --and therefore appealable--where the moving party had neither been arrested nor arraigned. United States v. Alexander, 428 F.2d 1169, 1171 (8th Cir.1970). More recently, the Seventh Circuit also has taken this position, holding that a Rule 41(e) motion becomes interlocutory only when criminal charges have been filed against the appellant. Mr. Lucky Messenger Service, Inc. v. United States, 587 F.2d 15, 16 (7th Cir.1978) ("The motion for return of property is not one tied to a criminal prosecution in esse against the movant until the criminal process shifts from the investigatory phase to the accusatory."); United States v. One Residence and Attached Garage, supra. The Sixth and Tenth Circuits have also taken this view. See, e.g., Coury v. United States, 426 F.2d 1354 (6th Cir.1970); Gottone v. United States, 345 F.2d 165 (10th Cir.), cert. denied, 382 U.S. 901, 86 S.Ct. 234, 15 L.Ed.2d 155 (1965). ⁴ Under this analysis, although the investigation into Young's affairs...