In re Grand Jury Proceedings

• Decision Date: 07 August 2001
• Docket Number: No. 00-10357-WGY.,00-10357-WGY.
• Citation: 158 F.Supp.2d 96
• Parties: In re GRAND JURY PROCEEDINGS
• Court: U.S. District Court — District of Massachusetts

158 F.Supp.2d 96

In re GRAND JURY PROCEEDINGS

No. 00-10357-WGY.

United States District Court, D. Massachusetts.

August 7, 2001.

MEMORANDUM AND ORDER

YOUNG, Chief Judge.

The Government is presently before this Court seeking an order authorizing it to disclose grand jury proceedings to specified employees of the Massachusetts Insurance Fraud Bureau (the "Bureau") pursuant to Federal Rule of Criminal Procedure 6(e)(3)(A)(ii) ("[A][ii]"). Although —seemingly as matter of course— several judges in this district (myself included) have in the past issued similar court orders allowing grand jury disclosures to employees of the Bureau pursuant to (A)(ii),¹ this Court now pauses to consider in detail the validity of such disclosures in light of the non-ex parte nature of this proceeding and the resultant full briefing and argument that this proceeding has occasioned.

I. Background

A. The Government's Motion

On September 15, 2000, the Government filed a Motion for Leave to Disclose Grand Jury Materials to Outside Experts Assisting Investigation. The Government's motion sought to disclose, pursuant to (A)(ii), documents and information that are expected to be obtained by grand jury subpoena to investigators and data analysts employed by the Bureau. Mot. at 1. In particular, the Government wanted the Bureau "investigators and analysts [to] provide ... expertise concerning the workings of the insurance industry and concerning the variety of schemes by which insurance fraud is perpetrated." Id. ¶ 3.

The Government's motion described the Bureau investigators as government personnel reasoning that "[a]s insurance fraud experts deemed necessary by the undersigned attorney for the government to assist in the federal investigation, [the Bureau] investigators are `government personnel' within the meaning of Rule 6(e)(3)(A)(ii)." Id. ¶ 5. The motion also described the disclosure to Bureau investigators as limited to "the sole purpose of assisting the United States Attorney in the investigation and prosecution of federal criminal offenses." Id. ¶ 7.

B. Procedural Posture

Upon initial consideration of the Government's September 15, 2000 motion for grand jury disclosure, this Court concluded that (A)(ii) is self-executing and hence does not require the Government to seek judicial approval to disclose grand jury proceedings to government personnel. Mem. of Nov. 1, 2000, 2000 WL 1678078, at *1. Agreeing that (A)(ii) is self-executing, the Government nonetheless sought a court order authorizing disclosure under (A)(ii) "as a matter of prudence, given the importance of the non-disclosure obligations of Rule 6(e)." Mot. ¶ 5 n.1. This Court disagreed with the Government's tack. This Court perceived the Government's attempt to secure a court order pursuant to (A)(ii) not as a valid effort to comply with that rule, but rather as an effort to acquire "a little `cover' as [the Government] pursues its investigatory responsibilities in conjunction with Bureau employees." Mem. of Nov. 1, 2000, 2000 WL 1678078, at *2. Seeing no concrete Governmental need for a court order, the Court concluded that there was no case or controversy ripe for adjudication before it. Id.

On December 4, 2000, the Government filed a Motion for Reconsideration accompanied by a Motion to Unseal the Motion for Reconsideration. In response, this Court unsealed the Motion for Reconsideration and determined that it would be appropriate to proceed on an adversary, rather than ex parte, basis. The Court accordingly notified the local Federal Defender Office and the Massachusetts Association of Criminal Defense Lawyers and invited them to file briefs as amici curiae. On March 29, 2001, this Court held a hearing at which both the Government and the amici were present. In light of the Government's Motion for Reconsideration, this Court now addresses the merits of the Government's original motion for grand jury disclosure.

C. The Massachusetts Insurance Fraud Bureau

The Massachusetts Legislature authorized two voluntary associations of Massachusetts insurance carriers, the Automobile Insurance Bureau of Massachusetts and the Workers' Compensation Rating and Inspection Bureau of Massachusetts, to create the Massachusetts Insurance Fraud Bureau. See generally Mass. Gen. Laws ch. 266, § 111B historical & statutory notes; Commonwealth v. Ellis, 429 Mass. 362, 364-66, 708 N.E.2d 644 (1999). The Bureau investigates charges of fraudulent insurance transactions and refers any violations of law regarding insurance fraud to the appropriate prosecutor. Act of Dec. 5, 1996, ch. 427, § 13, 1996 Mass. Acts 1528, 1532-35.

As an investigatory entity, the Bureau has special access to various confidential records when used pursuant to a Bureau investigation and only for Bureau purposes. § 13(d), 1996 Mass. Acts at 1533.² The Bureau is also authorized to request testimony and the production of documents; failure to provide the Bureau with such requested information can result in the involvement of the Massachusetts Attorney General. § 13(g), 1996 Mass. Acts at 1534.

Fifteen board members govern the Bureau: five public officials and five officials from each of the two private insurance associations. § 13(a), 1996 Mass. Acts at 1532.³ The two private insurance associations exclusively fund the Bureau. § 13(c), 1996 Mass. Acts at 1533. In addition, the insurance associations are required to pay into a general fund for the costs of the Office of the Massachusetts Attorney General related to the prosecution and investigation of insurance fraud. Act of June 21, 1995, ch. 38, § 210, 1995 Mass. Acts 110, 519-20. See generally Mass. Gen. Laws ch. 26, § 8E historical & statutory notes; Ellis, 429 Mass. at 366, 708 N.E.2d 644. The Attorney General must use the assessments "for the purpose of the investigation and prosecution of automobile insurance fraud matters and workers' compensation insurance fraud matters referred" to him by the Bureau. § 210, 1995 Mass. Acts at 520.

Because of its structure, it is not clear whether the Bureau is a public or private entity. In Commonwealth v. Ellis, 429 Mass. 362, 708 N.E.2d 644 (1999), the Massachusetts Supreme Judicial Court considered whether the Bureau's involvement in assisting the Attorney General's office in the prosecution of insurance fraud cases violated a criminal defendant's due process rights by undermining the disinterestedness of the prosecutor, id. at 363-64, 708 N.E.2d 644. The Supreme Judicial Court concluded that it did not. Id. at 370, 708 N.E.2d 644. Although the Supreme Judicial Court did not specifically address the issue, it seemed to assume without deciding that the Bureau is a private entity. See United States v. Pimental, 199 F.R.D. 28, 33 (D.Mass.2001) (Gertner, J.) ("It is quite obvious that the Supreme Judicial Court never doubted [the Bureau's] status as a private, non-governmental agency in Ellis. A close reading of Ellis discloses that the court presumed the private nature of the [Bureau] throughout its opinion.").

The state and federal case law is not uniform with respect to the status of the Bureau. Compare In re Justices of the Superior Court, 218 F.3d 11, 13 (1st Cir. 2000) ("quasi-governmental entity"), with Pimental, 199 F.R.D. at 34 ("private agency"), and In re Ellis, 425 Mass. 332, 340, 680 N.E.2d 1154 (1997) ("private investigative agency"), and Commonwealth v. Ellis, No. 97-1922, 1998 WL 470551, at *2 (Mass.Super.Jul.31, 1998) (Bohn, J.) (same), aff'd, 429 Mass. 362, 708 N.E.2d 644 (1999). See also Commonwealth v. Sbordone, 424 Mass. 802, 806-09, 678 N.E.2d 1184 (1997) (treating Bureau investigator as civilian in considering validity of his presence during execution of search warrant).

In short, the Bureau has a dual public and private nature that normally would complicate a case such as this one. The Government, however, does not here argue that the Bureau is public rather than private, because it does not think this question is relevant. Thus, for purposes of this motion, the Court will assume that the Bureau is a private entity and that its employees are similarly private individuals.

II. Analysis

A. Rule 6(e): Disclosure of Grand Jury Proceedings

The very functioning of the grand jury system depends on the secrecy of grand jury proceedings. Douglas Oil Co. v. Petrol Stops N.W., 441 U.S. 211, 218, 99 S.Ct. 1667, 60 L.Ed.2d 156 (1979). The specific reasons for grand jury secrecy are well established:

(1) To prevent the escape of those whose indictment may be contemplated; (2) to insure the utmost freedom to the grand jury in its deliberations, and to prevent persons subject to indictment or their friends from importuning the grand jurors; (3) to prevent subornation of perjury or tampering with the witnesses who may testify before [the] grand jury and later appear at the trial of those indicted by it; (4) to encourage free and untrammeled disclosures by persons who have information with respect to the commission of crimes; (5) to protect innocent accused who is exonerated from disclosure of the fact that he has been under investigation, and from the expense of standing trial where there was no probability of guilt.

Id. at 219 n. 10, 99 S.Ct. 1667 (alteration in original) (quoting United States v. Procter & Gamble Co., 356 U.S. 677, 681-82 n. 6, 78 S.Ct. 983, 2 L.Ed.2d 1077 [1958]).

Rule 6(e) sets forth the general rule of secrecy for grand juries, Fed.R.Crim.P. 6(e)(2), as well as the instances in which exceptions to the rule of secrecy are permitted, Fed.R.Crim.P. 6(e)(3). The current rule provides six exceptions to the general rule of grand jury secrecy, allowing disclosures (1) to an attorney for the Government, Fed.R.Crim.P. 6(e)(3)(A)(i); (2) to government personnel, Fed. R.Crim.P. 6(e)(3)(A)(ii); (3) when directed by a court in connection with a court proceeding, Fed.R.Crim.P. 6(e)(3)(C)(i); (4) at the request of the defendant when permitted by a court, Fed.R.Crim.P. 6(e)(3)(C)(ii); (5) to...