In re Grand Jury Proceedings Involving Berkley & Co., Misc. 3-79-3.

• Citation: 466 F. Supp. 863
• Decision Date: 27 March 1979
• Docket Number: Misc. 3-79-3.
• Parties: In re GRAND JURY PROCEEDINGS INVOLVING BERKLEY AND COMPANY, INC., and others.
• Court: U.S. District Court — District of Minnesota

466 F. Supp. 863

In re GRAND JURY PROCEEDINGS INVOLVING BERKLEY AND COMPANY, INC., and others.

Misc. 3-79-3.

United States District Court, D. Minnesota, Third Division.

March 6, 1979.

On Motion to Reconsider March 27, 1979.

COPYRIGHT MATERIAL OMITTED

Richard E. Vosepka, Jr., Asst. U. S. Atty., Minneapolis, Minn., for Government.

Leonard J. Keyes, St. Paul, Minn., Richard B. Solum, Alan G. Cunningham, Bruce F. Thompson, Allen I. Saeks, Roger J. Magnuson, Minneapolis, Minn., for defendants.

DEVITT, Chief Judge.

FACTS

Berkley and Company, Inc. (Berkley) and a number of individuals associated with that company are the apparent targets of an extensive investigation by United States Customs agents for possible customs fraud. The United States Attorney intends to present evidence accumulated by the Customs agents to the Minnesota federal grand jury. Much of that evidence was obtained through a seizure, pursuant to a warrant, of about 48 boxes of documents from Berkley's corporate headquarters in Spirit Lake, Iowa, on December 12, 1978. The government obtained other documents from a former Berkley employee, who may have stolen those documents from the company.

Berkley now moves: (1) to suppress the evidence obtained as a result of the December 12, 1978 seizure; (2) in the alternative, to order the grand jury not to review corporate documents protected by the attorney-client privilege; (3) to order the government to provide it with copies of the documents allegedly stolen by the former corporate employee; and (4) to adjudge an assistant United States Attorney and a United States Customs Agent in contempt of court. With the exceptions noted below, these motions are denied.

This case has a rather complicated procedural background which is relevant to the present motions. In January of 1979 Berkley brought motions to suppress the evidence obtained in the December 12 seizure and to have 279 of those documents declared privileged as communications between attorney and client. These motions were brought in the Northern District of Iowa pursuant to Rule 41(e) of the Federal Rules of Criminal Procedure, which permits "a person aggrieved by an unlawful search and seizure to move the district court for the district in which the property was seized for the return of the property . . .." Prior to the Iowa court's ruling on the motions, the United States Attorney attempted to submit the documents to the Minnesota federal grand jury. Berkley requested Magistrate McPartlin to issue an order halting the grand jury investigation until the Iowa federal court ruled on its motions, and on February 7, 1979, the magistrate issued such an order. Shortly thereafter, on February 9, Judge McManus of the Iowa court did rule on Berkley's motions. Judge McManus, however, refused to reach the merits of those motions. Rather, he held that the most prudent course was for the trial court to decide them and that Berkley would suffer no irreparable harm if the motion to suppress was decided by the trial court rather than by him. Berkley immediately brought the present motions before this court, claiming that this court is the trial court and thus is entitled to decide the present motions.

DISCUSSION

The Rule 41(e) Motion

Berkley's motion to suppress the documents obtained in the December 12 seizure is based on Rule 41(e) of the Federal Rules of Criminal Procedure. The threshold issue with respect to this motion is whether this court can rule on the Rule 41(e) motion at the present time, prior to indictment. The language of Rule 41(e) is not clear on this question. As quoted earlier, it provides that such a motion can be made prior to indictment in the district where the property was seized, here the Northern District of Iowa. It goes on to state that "If a motion for return of property is made or comes on for hearing in the district of trial after indictment or information is filed, it shall be treated also as a motion to suppress under Rule 12." (emphasis supplied). Rule 41(e), however, is silent on whether this court, which is located in the district where any future trials probably would occur, can rule on the motion prior to indictment.

Berkley asserts that the silence of Rule 41(e) as to this court's authority to decide its motion prior to indictment should not be read as precluding this court from acting. The company makes two arguments supporting that assertion. First, Berkley correctly argues that there is a strong policy underlying Rule 41(e) in favor of having the trial court rule on the legality of searches and seizures. This policy, claims Berkley, would be frustrated if the rule was interpreted as allowing pre-indictment Rule 41(e) motions to be brought only in the district where the property was seized and not in the district of trial. Second, Berkley contends that if this court refuses to rule on its motion it will be unfairly caught between inconsistent judicial rulings, with the Iowa court deferring to this court and this court refusing to act. While both of these arguments have some appeal, they lose their attractiveness when closely scrutinized.

The 1972 Advisory Committee Notes make clear that the policy of Rule 41(e) is "to require the motion to suppress evidence to be made in the trial court" and "to have all pretrial motions disposed of in a single court appearance" before the trial court pursuant to Rule 12. Only when there is a clear violation of the Fourth Amendment and the aggrieved party is suffering irreparable harm should the pre-indictment Rule 41(e) remedy be invoked. See, e. g., United States v. 1617 Fourth Ave. S.W., 406 F.Supp. 527 (D.Minn.1976). It was on these principles that the Iowa court deferred to the trial court. These same principles lead inevitably to the conclusion that this court also is not the proper one to rule, prior to indictment, on the legality of the December 12 seizure. This court is located in the district where any future criminal trials probably would occur, but it is not the trial court. If any indictments are handed down, there is no guarantee that this court, rather than other courts in this district, would be assigned the resulting criminal trials. Thus, if this court was to rule on Berkley's Rule 41(e) motion, it would frustrate the policies underlying the rule just as surely as had the Iowa court ruled on the motion. Moreover, Rule 41(e) contains no express authorization for this court to rule prior to indictment. Berkley has already had its shot at a pre-indictment Rule 41(e) remedy, and the Iowa court, finding no irreparable harm or clear constitutional violation, refused to grant that remedy and deferred to the trial court.

There is a second important reason why this court should not rule on Berkley's motion to suppress at the present time. The Rule 41(e) motions brought in Iowa and in this court already have delayed the grand jury investigation for one month, and if this court considered the merits of Berkley's motion, a further delay would occur. The Supreme Court in United States v. Calandra, 414 U.S. 338, 94 S.Ct. 613, 38 L.Ed.2d 561 (1974), in holding that the exclusionary rule does not apply to grand jury proceedings, made clear that grand jury investigations must not be impeded by minitrials and preliminary hearings on Fourth Amendment questions. Id. at 349-52, 94 S.Ct. 613. That has also long been the policy in this circuit. See Truchinski v. United States, 393 F.2d 627 (8th Cir. 1968); West v. United States, 359 F.2d 50 (8th Cir. 1966). Thus a further delay of the grand jury investigation to decide Berkley's Rule 41(e) motion is impermissible.

Motion to Provide Copies of Stolen Documents

The government intends to present certain documents to the grand jury that it obtained from a former employee of Berkley. Berkley claims those documents were stolen by the former employee but does not allege that the employee was acting on behalf of the government when he stole the documents. Berkley now moves for an order compelling the government to provide it with copies of the documents so the target defendants can decide whether they should testify before the grand jury. In essence, Berkley is requesting pre-indictment discovery of the government's file. While the government is free to provide such discovery, this court cannot compel it to do so.

Rule 16 of the Federal Rules of Criminal Procedure limits discovery to "defendants," which of necessity excludes discovery under the Rules prior to indictment or information. Recognizing this, Berkley asks the court to invoke its inherent supervisory power over the grand jury. The company and the individual target defendants claim that without disclosure they will be denied effective assistance of counsel, because the decision of whether and how to testify before the grand jury would be made in a vacuum. The logic of Berkley's contentions is somewhat difficult to perceive.

This court's supervisory power normally will be invoked only to correct abusive practices by the grand jury or to protect substantial rights of a witness. See, e. g. United States v. Dionisio, 410 U.S. 1, 17-18, 93 S.Ct. 764, 35 L.Ed.2d 67 (1973); Bursey v. United States, 466 F.2d 1059 (9th Cir. 1972). Here, no abusive or illegal practices by the grand jury are claimed; the allegedly stolen documents are legally in possession of the government and may properly be considered by the grand jury. Compare United States v. Calandra, 414 U.S. 338, 94 S.Ct. 613, 38 L.Ed.2d 561 (1974). Furthermore, target defendants' right to effective assistance of counsel is not nullified by the government's refusal to allow discovery prior to their testifying before the grand jury. Grand jury proceedings are not adversary and a witness does not have all the constitutional protections afforded a defendant at trial. A witness can invoke his right against self incrimination and may have his attorney present outside the grand jury room to consult with concerning that right. See ...