In Re Grand Jury Investigation Of Possible Violation Of 18 U.S.C. § 1461 Et Seq.

Decision Date26 October 2009
Docket NumberMisc. No. 09-118(RCL).
Citation706 F.Supp.2d 11
PartiesIn re GRAND JURY INVESTIGATION OF POSSIBLE VIOLATION OF 18 U.S.C. § 1461 et seq.
CourtU.S. District Court — District of Columbia

MEMORANDUM AND ORDERROYCE C. LAMBERTH, Chief Judge.

The United States has requested that this Court compel Company X to comply with four subpoenas issued by a grand jury sitting in this district and served on Company X on September 5, 2008. Having considered the United States' motion to compel, Company X's response, the reply thereto, and the arguments of counsel, the United States' motion is granted in part and denied in part for the reasons set forth below.

I. BACKGROUND

On September 5, 2008, the United States served four grand jury subpoenas on Company X Gov't Motion to Compel at 2 [hereinafter Motion]. The subpoenas sought four categories of information: 1

(1) the name, address, and telephone number of the businesses that processed financial transactions for Company X between December 1, 2007 and June 30, 2008;

(2) the names, positions, hours, location of employment, home address and telephone numbers for all persons employed by Company X between December 1, 2007 and June 30, 2008;

(3) a copy of records identifying the true name(s) and alias(es) of the owner(s) of Company X from its date of incorporation up to and including June 2008;
(4) a copy of records that show the identity of all movies sold or distributed, including the date of each transaction, payment received, and method and date of each of each shipment, from customer purchases from the website/domain name www. [_____]. com between December 1, 2007 and December 15, 2007, and April 1, 2008 and April 15,2008.

Id. The subpoenas also requested that Company X provide a completed custodian of records form for documents responsive to each subpoena. Id.

Company X provided documents responsive to Subpoenas One and Two; however, they did not complete the requested custodian of records forms. Id. at 3. No documents were produced in response to Subpoena Three, which requested materials identifying the owner of Company X Id. Lastly, Company X responded to Subpoena Four by providing only records for sales made in the District of Columbia and redacting the names of the customers from those records. Id.

After first discussing the standards for quashing a subpoena, this memorandum and order addresses Company X's refusal to provide custodian of records forms infra Part III, and then evaluates the company's refusal to comply with Subpoenas Three and Four, infra Parts IV and V respectively.

II. STANDARD FOR QUASHING A GRAND JURY SUBPOENA

The grand jury's charge is to investigate whether a crime has been committed and to make any and all inquiries until it is satisfied one way or the other. United States v. R. Enterprises, Inc., 498 U.S. 292, 297, 111 S.Ct. 722, 112 L.Ed.2d 795 (1991). But the grand jury's “power is not unlimited.” United States v. Calandra, 414 U.S. 338, 346, 94 S.Ct. 613, 38 L.Ed.2d 561 (1974). Its powers are constrained by any valid privilege, whether established by the Constitution, statute, or the common law. Id.; see also Branzburg v. Hayes, 408 U.S. 665, 688, 92 S.Ct. 2646, 33 L.Ed.2d 626 (1972) (“Although the powers of the grand jury are not unlimited and are subject to the supervision of a judge, 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, is particularly applicable to grand jury proceedings.”) (citations omitted) (emphasis added). A court may quash a subpoena where compliance would be unreasonable or oppressive. Fed.R.Crim.P. 17(c)(2). While what is reasonable depends on the context, it is clear that a subpoena may be quashed if it cannot withstand constitutional scrutiny. R. Enters., 498 U.S. at 299, 111 S.Ct. 722; In re Grand Jury, John Doe No. G.J.2005-2, 478 F.3d 581, 585 (4th Cir.2007) (stating Rule 17(c) offers a vehicle for a subpoenaed party to assert a constitutional challenge). When deciding whether to quash a subpoena, it must be remembered, however, that a grand jury is presumed to act within the scope of its legitimate authority, absent a strong showing to the contrary. R. Enters., 498 U.S. at 301, 111 S.Ct. 722 (citations omitted).

III. CUSTODIAN OF RECORDS FORMS

The United States' motion seeks that Company X's custodian of records be required to qualify responsive documents as business records under Federal Rule of Evidence 803(6) by either completing a business records form or testifying before the grand jury. The company's custodian of records, Mr. X-who is also the company's sole shareholder and president-has invoked his Fifth Amendment right against self-incrimination as the basis for his refusal to complete the forms. Response at 10.

A corporation itself has no Fifth Amendment privilege. Braswell v. United States, 487 U.S. 99, 104-105, 108 S.Ct. 2284, 101 L.Ed.2d 98 (1988). As an extension of this rule, a company's custodian of records may not resist a subpoena to the company by invoking his own Fifth Amendment privilege. Id. at 117, 108 S.Ct. 2284. The conflict between the custodian's individual privilege and the company's lack of privilege has several consequences, some more farcical than others. For example, while the government may not use the custodian's act of production against the custodian himself, the company's act of production may be used against the custodian-even though they are one in the same absent this legal fiction. Id. at 118, 108 S.Ct. 2284. And because production of the documents may be compelled against the custodian, several courts have held that some (very) limited testimony may also be compelled if it is auxiliary to the act of production. See Curcio v. United States, 354 U.S. 118, 125, 77 S.Ct. 1145, 1 L.Ed.2d 1225 (1957); In re Grand Jury Empaneled on Apr. 6, 1993, 869 F.Supp. 298, 301 (D.N.J.1994); see also In re Grand Jury Proceedings, 473 F.Supp.2d 201, 205 (D.Mass.2007). The Supreme Court has explained:

The custodian's act of producing books or records in response to a subpoena duces tecum is itself a representation that the documents produced are those demanded by the subpoena. Requiring the custodian to identify or authenticate the documents for admission into evidence merely makes explicit what is implicit in the production itself. The custodian is subjected to little, if any, further danger of incrimination.

Curcio, 354 U.S. at 125, 77 S.Ct. 1145; see also

Braswell v. United States, 487 U.S. 99, 114, 108 S.Ct. 2284, 101 L.Ed.2d 98 (1988). The D.C. Circuit has elaborated that “although an officer who produces books and records may be required to produced ‘auxiliary information,’ such as authentication of the items produced, this doctrine is sharply limited to information which creates no danger of incrimination.” Communist Party v. United States, 331 F.2d 807, 813 (D.C.Cir.1963).

As such the Court must consider whether completing the custodian of records forms is auxiliary to the act of production and whether doing so would create any further danger of incrimination. Two courts have held that a custodian may not be compelled to complete such forms over the assertion of his Fifth Amendment rights see In re Grand Jury Proceedings, 473 F.Supp.2d 201; In re Grand Jury Empaneled on Apr. 6, 1993, 869 F.Supp. 298, while one court has that custodian may be so compelled, see In re Trial Subpoena Duces Tecum, 927 F.2d 244 (6th Cir.1991).

Although the Supreme Court has held that a custodian may be compelled to authenticate documents, Curcio, 354 U.S. at 125, 77 S.Ct. 1145, qualifying documents under Rule 803(6) entails more than just authentication. Authentication is merely a condition precedent for admissibility, whereas qualifying a document as a business record establishes both admissibility as well as authenticity. Compare Fed.R.Evid. 803(6) with Fed.R.Evid. 901; see also In re Grand Jury Empaneled on Apr. 6, 1993, 869 F.Supp. at 304. Mr. X, if called on solely to authenticate the documents, would only be required to state that the documents that have been produced are those responsive to the subpoena. This testimony, by itself, would merely make explicit what was implicit in the production of the documents and as such it is auxiliary to the act of production. See Curcio, 354 U.S. at 125, 77 S.Ct. 1145. Requiring Mr. X to qualify the documents as business records would involve far more, and likely poses a danger of self-incrimination. If compelled, Mr. X would have to testify about Company X's business practices, that the records were made at or near the time of the events they record, and by or from a person with knowledge of the events recorded therein. See Fed.R.Evid. 803(6). None of that testimony is implicit in the act of production, see Curcio, 354 U.S. at 125, 77 S.Ct. 1145, nor is it clear that it would not be incriminatory.2 One of the district courts that quashed such a subpoena did so relying on this rationale. In re Grand Jury Empaneled on Apr. 6, 1993, 869 F.Supp. at 306. The other did so solely on the ground that business records testimony was not implicit in the act of production. In re Grand Jury Proceedings, 473 F.Supp.2d at 201.

One court, however, has held that a custodian may be compelled to qualify subpoenaed documents as business records. In re Trial Subpoena Duces Tecum, 927 F.2d at 251 [hereinafter Variety Distributing ]. The Variety Distributing court seized on language from Curcio that seemed to contemplate admissibility rather than just authentication. Id. at 248. Indeed, the Curcio court did say that a custodian may be compelled to “authenticate the documents for admission into evidence Curcio, 354 U.S. at 125, 77 S.Ct. 1145. But all documents must be authenticated before they can be admitted into evidence. Fed.R.Evid. 901. And when read in context, it is clear that Curcio only contemplates testimony that “makes explicit what is...

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