IN RE GRAND JURY SUBPOENA DATED NOV. 14, 1989, Misc. No. 16107.

• Decision Date: 08 January 1990
• Docket Number: Misc. No. 16107.
• Parties: In re GRAND JURY SUBPOENA DATED NOVEMBER 14, 1989.
• Court: U.S. District Court — Eastern District of Pennsylvania

728 F. Supp. 368

In re GRAND JURY SUBPOENA DATED NOVEMBER 14, 1989.

Misc. No. 16107.

United States District Court, W.D. Pennsylvania.

January 8, 1990.

William V. Conley, Asst. U.S. Atty.

Edward P. Carey, Regional Counsel, Dept. of Public Welfare, Office of Legal Counsel, Pittsburgh, Pa.

MEMORANDUM OPINION

COHILL, Chief Judge.

Presently before the Court is the Government's Motion to Enforce Grand Jury Subpoena. For the reasons that follow, we will deny the motion.

I. BACKGROUND

A federal grand jury sitting in Pittsburgh, Pennsylvania is investigating a heroin and cocaine distribution ring. In addition to considering violations of the drug laws, the grand jury is also investigating for possible violations of the federal tax laws.

On March 30, 1989, the Government subpoenaed the records of 12 individuals allegedly receiving public assistance from the Pennsylvania Department of Welfare ("DPW"). Subsequently, the Government cancelled the subpoena because it learned that federal regulations to certain public assistance programs such as Aid to Families with Dependent Children ("AFDC"), the Medical Assistance Act and the Food Stamp Act, prohibited blanket disclosure.

Thereafter, the Government issued the instant subpoena, requesting the records and files of 5 individuals allegedly receiving public assistance. The subpoena specifically excluded any records pertaining to the AFDC program. On November 2, 1989, Edward Carey, Regional Counsel for DPW at the Pittsburgh, Pennsylvania office, accepted service of the subpoena. An investigation of the subpoenaed records revealed that one individual had no record, one received AFDC benefits, two received food stamps and medical assistance, and the fifth individual received both food stamps and general assistance, a state funded program. Conceding that it was not entitled to the records of the individuals receiving federally funded public assistance, the Government amended its request to those records of the one individual who received both general assistance and food stamps.

When Mr. Carey appeared before the grand jury on November 14, 1989, he refused to produce the records of the individual receiving food stamps and general assistance. Citing Pennsylvania regulations, Mr. Carey explained that like the federal regulations, Pennsylvania law prohibited the disclosure of the records of a general assistance recipient. Alternatively, he maintained that the food stamp portion of the record was inseparable from the general assistance portion of the record, and that he was unable to divulge this information pursuant to the Food Stamp Act confidentiality regulation.

The Government, believing that it is entitled to the records of the general assistance recipient, has filed the instant motion to enforce its subpoena. In support of its motion, the Government asserts that, "the statutes of the Commonwealth of Pennsylvania are not controlling where a person is accused of a violation of federal law." Government's Memorandum, at 3. In addition, the Assistant United States Attorney has attached a Schofield affidavit stating that the records sought are necessary and relevant to the investigation and are "being sought for no other purpose than that indicated within this affidavit." Affidavit of William V. Conley, Esq., Attachment C; see In re Grand Jury Proceedings, 486 F.2d 85 (3d Cir.1973) (Schofield I); In re Grand Jury Proceedings, 507 F.2d 963 (3d Cir. 1975) (Schofield II).

II. ANALYSIS

The Fifth Amendment to the United States Constitution requires a grand jury indictment for the institution of federal criminal prosecutions for capital or other serious crimes. The grand jury thus has the "dual function of determining if there is probable cause to believe that a crime has been committed and of protecting citizens against unfounded criminal prosecutions." Branzburg v. Hayes, 408 U.S. 665, 686-87, 92 S.Ct. 2646, 2659, 33 L.Ed.2d 626 (1972). Recognizing the grand jury's role in fair and effective law enforcement, the United States Supreme Court has held that the grand jury's investigative powers are broad. Id., 408 U.S. at 688, 92 S.Ct. at 2660; United States v. Calandra, 414 U.S. 338, 343, 94 S.Ct. 613, 617, 38 L.Ed.2d 561 (1974).

However, the grand jury does not have unlimited investigatory power. The scope of its powers is narrowed by the "longstanding principle that `the public ... has a right to every man's evidence,' except for those persons protected by a constitutional, common-law, or statutory privilege...." Id., 408 U.S. at 688, 92 S.Ct. at 2660 (quoting United States v. Bryan, 339 U.S. 323, 331, 70 S.Ct. 724, 730, 94 L.Ed. 884 (1950)).

DPW contends that the federal grand jury subpoena unconstitutionally intrudes into the reach of state sovereignty because as a matter of state law, the state records are privileged from subpoena. In addition, DPW maintains that Pennsylvania law prevents it from releasing the records without an order from a court of competent jurisdiction.

The raison d'etre for a federal grand jury, however, is found in the Fifth Amendment to the United States Constitution. Under the Supremacy Clause, Article VI, Clause 2, the superior authority of the federal Constitution controls the conflict between state nondisclosure laws and federal investigatory powers. In addition, as the Government correctly points out, Rule 501 of the Federal Rules of Evidence provides that federal, not state, privilege law applies in criminal cases brought in federal court. Thus, the fact that an evidentiary privilege under the Pennsylvania statute exists which DPW could assert in a criminal prosecution in state court, does not compel the court to recognize this privilege in federal criminal proceedings. United States v. Gillock, 445 U.S. 360, 368, 100 S.Ct. 1185, 1191, 63 L.Ed.2d 454 (1980).

Rule 501 of the Federal Rules of Evidence provides in relevant part:

Except as otherwise required by the Constitution of the United States or provided by Act of Congress or in rules prescribed by the Supreme Court pursuant to statutory authority, the privilege of a witness, person, government, State or political subdivision thereof shall be governed by the principles of the common law as they may be interpreted by the courts of the United States in the light of reason and experience.

This rule grants to the federal judiciary the responsibility of developing recognized privileges and formulating new privileges by resorting to the principles of common law interpreted "in the light of reason and experience." Rule 501 thus allows for the flexible development of the federal common law of privilege on a case-by-case basis. Gillock, 445 U.S. at 367, 100 S.Ct. at 1190.

In developing the federal common law of privilege, federal courts attempt to balance the public's need for the full development of relevant facts in federal litigation against the need for confidentiality in order to achieve the objectives underlying the privilege claimed. Matter of Grand Jury Impaneled January 21, 1975, 541 F.2d 373, 382 (3d Cir.1976). In addition, as a principle of comity, federal courts recognize state evidentiary privileges as long as federal substantive and procedural policy is not impaired. In re Production of Records to Grand Jury, 618 F.Supp. 440, 442 (D.Mass.1985); Schafer v. Parkview Memorial Hospital., 593 F.Supp. 61, 63 (N.D.Ind.1984); In re Grand Jury Empanelled January 21, 1981, 535 F.Supp. 537, 541 (D.N.J.1982).

The claim of privilege at issue in this case arises from a state statute. Specifically, the Pennsylvania legislature has granted to the DPW the authority to make and enforce regulations concerning the protection of information obtained in the welfare process. 62 Pa.Stat.Ann. § 404. Section 105.1(f) of the Pennsylvania Code provides:

No individual may have direct access to the records of the Department unless that individual has an official connection with any part of the Department, or is an employe of the Auditor General's Department, the Treasury Department or another Commonwealth or Federal agency officially charged with administrative supervision, review, evaluation or audit. Morevoer, this access to records is confined to materials essential to carrying out the official functions of the Department or agency involved; however, employees of agencies who are engaged in investigation of welfare fraud will in no way be prohibited access to case records. No individual may have direct access to his own case record except as provided in (Section) 105.5 (relating to access by an individual to his case file).

55 Pa.Code 105.1(f).

The privilege created by this regulation, termed a "required reports privilege," stems from a state law which requires citizens to reveal personal information under a promise of confidentiality. 2 J. Weinstein & M. Berger, Evidence, 502(02), at 502-5 ("Weinstein's Evidence"). In the United States, many statutes and regulations prohibit disclosure of certain records containing information which citizens are compelled legally to submit to federal, state or local governments. These statutes generally are tied to specific regulatory areas such as income tax returns, census reports, selective service records, public health records and accident reports, among others. 2 Weinstein's Evidence, 502(02), at 502-5. The purpose of the grant of such a privilege is to encourage persons to report voluntarily and accurately private information that is needed for effective governmental functioning. In the Matter of Grand Jury Impaneled January 21, 1975, 541 F.2d 373, 380 (3d Cir.1976).

Thus, the precise question before this Court is whether, in light of reason and experience, we should adopt, as a matter of federal common law, the proposition that public assistance records, required to be filed by state law under assurances of confidentiality, are privileged against use in federal grand jury proceedings.

Apparently, no reported decisions of a federal court have addressed the...