In re Grand Jury Subpoena (John Doe, Inc.

• Decision Date: 13 January 2014
• Docket Number: Case No. 13–50987.
• Citation: 991 F.Supp.2d 968
• Parties: In re GRAND JURY SUBPOENA (JOHN DOE, INC.).
• Court: U.S. District Court — Eastern District of Michigan

991 F.Supp.2d 968

In re GRAND JURY SUBPOENA (JOHN DOE, INC.).

Case No. 13–50987.

United States District Court,

E.D. Michigan,

Southern Division.

Jan. 13, 2014.

F. William Soisson, U.S. Attorney's Office, Detroit, MI, for Grand Jury Subpoena (John Doe, Inc.).

OPINION AND ORDER GRANTING IN PART AND DENYING IN PART MOVANT'S MOTION TO QUASH GRAND JURY SUBPOENA

(Redacted)

DAVID M. LAWSON, District Judge.

Can the sole employee and owner of a corporation rely on the Fifth Amendment to refuse production of and testimony related to corporate documents subpoenaed by a grand jury? Settled law says the answer is “No,” for the most part, at least for the production part. But the sole agent of a one-person collective entity, such as a corporation, can assert her Fifth Amendment privilege to refuse testimony beyond certifying that the documents are authentic, that is, that they are what they purport to be.

The grand jury served a subpoena duces tecum on John Doe, Inc., a one-person corporation owned and operated by Mary Roe, demanding the production of corporate records relating to projects for ABC Company and XYZ Company. The subpoena states that in lieu of a personal appearance, Mary Roe, as the corporate agent, may furnish the records along with a certificate to be signed under oath verifying the authenticity of the records, and a second certificate attesting to certain foundational facts apparently intended to satisfy the business record exception to the hearsay rule, seeFed.R.Evid. 803(6). Mary Roe has moved to quash the subpoena on the ground that the acts of production and certification would violate her right against self-incrimination under the Fifth Amendment. After briefing, oral argument, and supplemental briefing by Mary Roe and the government, the Court concludes that the Fifth Amendment does not excuse Mary Roe from producing the records and certifying that they are authentic. However, Mary Roe may interpose the Fifth Amendment to resist certifying and testifying to facts that are required by Rule 803(6), because as an agent of a one-person entity, revealing that information could acknowledge facts beyond those inherent in the mere act of production, which in turn could amount to self-incrimination. Therefore, the motion to quash the grand jury subpoena will be granted in part and denied in part.

I.

Mary Roe is the owner of John Doe, a Michigan-based corporation established on March 28, 2011. The company has no other employees. The government alleges that John Doe joined with one of the targets of a current grand jury investigation to defraud XYZ Company out of thousands of dollars. The government says that John Doe billed XYZ Company, through ABC Company, for engineering services that it did not perform. ABC Company, the government alleges, bid on engineering projects and staffed those projects with its own employees or subcontractors. The government alleges that John Doe submitted invoices and received compensation for work that Mary Roe claimed to, but did not actually, perform.

The grand jury issued a subpoena on April 30, 2013 that directed John Doe to testify and produce documents relating to the company's business dealings with ABC Company and XYZ Company. The subpoena lists Mary Roe as John Doe's agent and was served on her. Mary Roe moved to quash the grand jury subpoena on the grounds that it is overbroad and violates her Fifth Amendment privilege against self-incrimination.

The documents requested include invoices, communications, payments received, and records of hours worked and/or projects completed between January 1, 2009 and December 31, 2012. The subpoena states that Mary Roe could avoid testifying if she provided to an FBI agent the listed documents concerning her business dealings with ABC Company and XYZ Company, but only if she completed two forms attached to the subpoena. The first attachment, entitled “Certificate of Authenticity of Business Records,” requires Mary Roe to state under penalty of perjury that (1) Mary Roe is either the custodian of the records or qualified to identify and authenticate the records, and (2) the records were made by a person with knowledge of the matters contained in the records. The second attachment, entitled “Waiver of Right to Appear Before Grand Jury and Records Receipt,” require Mary Roe to provide an itemized list of the documents, records, and objects produced. It also requires certification that the documents are responsive to the subpoena, and are within her possession, custody, or control.

II.

Mary Roe makes four arguments. First, she says that the subpoena is overbroad because it seeks records that predated the formation of the corporation, and therefore calls upon her to produce her personal documents, which are certainly protected by the Fifth Amendment. That argument is easily dispatched, since the government concedes that it only considers documents made after the corporation's formation to be responsive to the subpoena. Therefore, Mary Roe need not produce documents created before March 28, 2011.

Second, Mary Roe contends that John Doe performed no paid work for ABC Company or XYZ Company in the first three months of the corporation's existence. Therefore, she says, she had only personal business dealings with ABC Company before July, 2011 and any records of her personal business dealings with ABC Company are protected by the Fifth Amendment. Third, Mary Roe insists that the Court should quash the subpoena altogether because compliance with the subpoena would violate the Fifth Amendment. She says that compliance with the subpoena would incriminate her because she is the sole employee, officer, director, and shareholder of John Doe. Fourth, Mary Roe contends that compliance with the subpoena would require her to furnish an important link in the chain of evidence necessary to prosecute her for a crime if she is required to testify or certify that the documents are genuine and within her possession as corporate custodian, and that the documents were kept in the course of a regularly conducted business activity, it was the regular practice of the business to make the records, and the records were made by or from information transmitted by a person with knowledge of the documented transactions.

As an initial matter, a court may quash a subpoena “if compliance would be unreasonable or oppressive.” Fed.R. Crim.P. 17(c)(2). Both sides agree that the Fifth Amendment forbids an accused from being “compelled in any criminal case to be a witness against himself.” U.S. Const. amend. V. Because of this protection, the government may not force a citizen to produce to a grand jury self-incriminating private papers. Bellis v. United States, 417 U.S. 85, 87, 94 S.Ct. 2179, 40 L.Ed.2d 678 (1975) (reiterating that “the Fifth Amendment ... protects an individual from compelled production of his personal papers and effects as well as compelled oral testimony.”). A subpoena for such personal documents would be “unreasonable or oppressive.” “The constitutional privilege against self-incrimination ... is designed to prevent the use of legal process to force from the lips of the accused individual the evidence necessary to convict him or to force him to produce and authenticate any personal documents or effects that might incriminate him.” United States v. White, 322 U.S. 694, 698, 64 S.Ct. 1248, 88 L.Ed. 1542 (1944). The question that divides the parties here is whether the grand jury subpoena issued to Mary Roe's company trenches upon these fundamental rights.

A.

The Court cannot provide a clear answer to Mary Roe's objection to producing documents created during the company's first three months, because the partieshave not stated enough facts. As with the pre-incorporation documents, if the documents are Mary Roe's personal papers, they would not be responsive to the subpoena and probably would be protected by the Fifth Amendment. Any “records subpoenaed must in fact be organizational records held in a representational capacity. In other words, it must be fair to say that the records demanded are the records of the organization rather than those of the individual.” Bellis, 417 U.S. at 93, 94 S.Ct. 2179 (citing White, 322 U.S. at 701, 64 S.Ct. 1248). But if the documents can be characterized as corporate documents, then the obligation to produce is subject to the arguments discussed below. If there is some doubt about a particular document, then Mary Roe may submit it to the Court in camera and request a ruling.

B.

Mary Roe's argument that the Fifth Amendment shields her from producing the corporate documents as the custodian runs headlong into well established authority to the contrary. She acknowledges that the Fifth Amendment does not shield a corporation from producing company documents. “Since the privilege against self-incrimination is a purely personal one, it cannot be utilized by or on behalf of any organization, such as a corporation.” White, 322 U.S. at 699, 64 S.Ct. 1248; see also Braswell v. United States, 487 U.S. 99, 105, 108 S.Ct. 2284, 101 L.Ed.2d 98 (1988) ( “[T]here is a clear distinction ... between an individual and a corporation, and ... the latter has no right to refuse to submit its books and papers for an examination at the suit of the State.”) (quoting Hale v. Henkel, 201 U.S. 43, 74, 26 S.Ct. 370, 50 L.Ed. 652 (1906)). At least in this instance, corporations are not people. In order to claim Fifth Amendment immunity, “the papers and effects which the privilege protects must be the private property of the person claiming the privilege, or at least in his possession in a purely personal capacity.” White, 322 U.S. at 699, 64 S.Ct. 1248. The Supreme Court has drawn a bright line between an individual and a collective entity such as a corporation. See Braswell, 487 U.S. at 105, 108 S.Ct. 2284. “A custodian may not resist a subpoena for corporate records on Fifth Amendment grounds.” Id. at 113, 108 S.Ct. 2284. This is true even...