In re Grand Jury Sub. Feb. 28, Mar. 26, Oct. 4, 05-3886.

Decision Date04 January 2007
Docket NumberNo. 05-3886.,05-3886.
Citation472 F.3d 990
PartiesIn re GRAND JURY SUBPOENAS DATED FEBRUARY 28, 2002; MARCH 26, 2003; and OCTOBER 4, 2004.
CourtU.S. Court of Appeals — Eighth Circuit

Christopher W. Madel, argued, Minneapolis, MN, for appellant.

William H. Koch, argued, Asst. U.S. Atty., Minneapolis, MN, for appellee.

Before WOLLMAN, HANSEN, and BENTON, Circuit Judges.

HANSEN, Circuit Judge.

Appellant John Doe Corporation (JDC)1 appeals from the district court's2 judgment holding that the Government did not improperly use grand jury materials as part of a criminal investigation into JDC and a civil investigation into one of JDC's independent sales representative companies, XYZ; the district court's determination that it was not improper for the Department of Justice to disclose grand jury materials to another Department of the Government through ex parte orders issued by the district court without giving notice to JDC; and the district court's refusal to quash any of the subpoenas issued by the grand jury to JDC. After careful review, we affirm in part, dismiss in part, and remand in part.

I.

JDC is the target of a criminal investigation originated by a cabinet-level Department of the United States (the "other Department") into JDC's alleged violation of federal laws through the sale of restricted items. The investigation began in September 2000. XYZ is JDC's independent sales representative in question and was involved in arranging a sale. The lead agent in the criminal investigation is federal Special Agent Smith3 of the other Department who worked in conjunction with the United States Attorney's office in Minnesota, although he is not part of the Justice Department. As part of the investigation, a search warrant for JDC's headquarters was issued, and a search was executed in May 2001. The warrant and its supporting affidavit were unsealed three months later and revealed the federal laws claimed to have been violated. A grand jury subpoena was issued to JDC on February 28, 2002, seeking all documents related to JDC's contacts with a certain entity and all other individuals and entities in the same country. In response to this subpoena, more than 178,000 pages of documents were provided in April 2002 to the Assistant United States Attorney (AUSA) handling the case.

Shortly after the delivery of these documents, two representatives of the other Department met with an XYZ employee. A second grand jury subpoena was issued to JDC on March 26, 2003, requesting documents related to the shipping of certain items since January 1, 2001. More than 30,000 pages of documents were produced in response to the subpoena, with approximately 24,500 pages sent directly to Special Agent Smith for review.

A third grand jury subpoena was issued to JDC in October 2004. This subpoena repeated the request for documents related to a number of entities and asked JDC for documents related to correspondence between JDC and XYZ. JDC sent its responses to Special Agent Smith.

In July 2003, a JDC employee in charge of compliance with federal laws was granted immunity and testified before the grand jury. Special Agent Smith was present at a pretestimony interview the witness had with the AUSA, but was not in the grand jury room during the employee's testimony. A newspaper story after the employee's appearance and testimony named the employee and the employee's position, discussed the purported purpose of the investigation, quoted representatives of JDC, and stated the purported nature of the government investigation and portions of what had occurred in the investigation to date.

The other Department informed XYZ of its intent to initiate an administrative proceeding against XYZ in August 2003. Special Agent Smith was also in charge of this civil investigation for the other Department. Formal civil administrative proceedings were initiated by the other Department in February 2004, alleging that XYZ conspired to commit violations of various laws by arranging the sale of restricted items—the same charges as leveled against JDC in the affidavit supporting the search warrant.

On April 6, 2004, the AUSA asked JDC to provide three documents that JDC had produced in response to the grand jury subpoenas to the other Department for use in the civil administrative proceeding against XYZ. JDC refused, stating that it believed the documents were protected by Federal Rule of Criminal Procedure 6(e). In May 2004, the AUSA asked JDC to send two other documents to the other Department, but JDC again denied the request. In February 2005, the Government made a third request for JDC to send several documents to the other Department. This request was also denied by JDC, citing Rule 6(e).

As part of its defense in the civil matter, XYZ asked to depose Special Agent Smith. The other Department agreed, but before the deposition took place the other Department moved to stay the civil proceedings against XYZ until the grand jury investigation was finished. The other Department contended that because Special Agent Smith was in charge of both the criminal investigation of JDC and the civil investigation of XYZ, it would be almost impossible for him to give deposition testimony without potentially disclosing grand jury secrets. JDC's counsel received a copy of the other Department's response to XYZ's opposition to the stay, and from that response JDC learned that the district court had granted the Government's ex parte request for orders allowing the Government to disclose to the other Department the documents that JDC had declined to voluntarily provide.

Upon learning of these ex parte orders, JDC filed a motion for contempt and a motion for access to the ex parte motions and supporting papers. The district court denied the motion for contempt, declined to grant any injunctive relief, denied the motion to quash, and made no mention of allowing JDC access to the ex parte materials. JDC appeals, arguing that the district court erred by finding no violation of Federal Rule of Criminal Procedure 6(e), by allowing the government to obtain ex parte orders without giving notice to JDC, and by not granting JDC any relief from the grand jury subpoenas.

II.
A. Notice of the Government's Ex Parte Motion

We first address JDC's argument that it was legal error for the district court to allow the Government to seek ex parte orders without giving notice to JDC, even though JDC had specifically objected to the disclosure of the documents at issue. We review the district court's decision to disclose grand jury materials for abuse of discretion. In re Grand Jury Investigation, 55 F.3d 350, 354 (8th Cir.) (stating that a "decision to allow disclosure is entrusted to the substantial discretion of the district court, which must weigh the circumstances of each case" and that the district court's decision will only be overturned if the district court abused its discretion), cert. denied, 516 U.S. 917, 116 S.Ct. 307, 133 L.Ed.2d 211 (1995).

The need to preserve the secrecy of grand jury proceedings is well acknowledged and is in fact proscribed by the Federal Rules of Criminal Procedure. See generally Fed.R.Crim.P. 6(e)(2); Douglas Oil Co. of Calif. v. Petrol Stops Nw., 441 U.S. 211, 218-19, 99 S.Ct. 1667, 60 L.Ed.2d 156 (1979); In re Grand Jury Proceedings Relative to Perl, 838 F.2d 304, 306 (8th Cir.1988). Rule 6(e)(3) governs petitions to the district court for permission to disclose grand jury information. Relevant portions of the rule state that:

A petition to disclose a grand-jury matter . . . must be filed in the district where the grand jury convened. Unless the hearing is ex parte—as it may be when the government is the petitionerthe petitioner must serve the petition on, and the court must afford reasonable opportunity to appear and be heard to: . . . (ii) the parties to the judicial proceeding; and (iii) any other person whom the court may designate.

Fed.R.Crim.P. 6(e)(3)(F).

In the instant case, the Government was the petitioner and filed the petition to disclose grand jury matters ex parte—an action clearly permitted by Rule 6(e)(3)(F). The rule also clearly exempts ex parte hearings from the notice provisions. JDC's reliance on In re United States, 398 F.3d 615, 619 (7th Cir.2005), to support its argument that lack of notice is legal error is misplaced. The court in that case affirmatively upheld the district court's right to allow ex parte proceedings without providing notice to any other party. Id. (noting that the 1983 amendments to Rule 6(e) "explicitly authorize ex parte proceedings when the United States is the petitioner"). In these situations, the district court is to use its abundant discretion to determine if notice should be given. Id.; see also In re Grand Jury Investigation, 774 F.2d 34, 37 (2d Cir.1985) (denying claim that the district court erred by granting an ex parte motion under Rule 6(e) without providing notice and an opportunity to be heard to appellants), overruled on other grounds, 481 U.S. 102, 107 S.Ct. 1656, 95 L.Ed.2d 94 (1987). Here there was no misapplication of the Rule, as JDC argues, because the rule's plain language permits the district court to allow the Government to proceed ex parte. Thus, the question before us does not involve one of legal error, but rather whether or not the district court abused its discretion in allowing the Government to proceed ex parte without giving JDC notice and an opportunity to be heard.4

"The United States Supreme Court has consistently . . . recognized that the proper functioning of our grand jury system depends upon the secrecy of grand jury proceedings." In re Grand Jury Proceedings Relative to Perl, 838 F.2d at 306 (internal marks omitted). Particularly when a grand jury investigation is ongoing, district courts have broad discretion in taking action to protect the secrecy of that investigation. See In re Grand...

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3 cases
  • In re Grand Jury Subpoena Dated Aug. 14, 2019
    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • 9 Julio 2020
    ...in contempt for failing to provide the documents, establishing jurisdiction for appellate review. See In re Grand Jury Subpoenas Dated Feb. 28, 2002, 472 F.3d 990, 1000 (8th Cir. 2007). IDPS appeals, arguing the district court abused its discretion in denying the motion to quash. See United......
  • United States v. Spencer
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    • U.S. District Court — District of Minnesota
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    ...fact proscribed by the Federal Rules of Criminal Procedure." In re Grand Jury Subpoenas Dated Feb. 28, 2002, March 26, 2003, Oct. 4, 2004, 472 F.3d 990, 994 (8th Cir. 2007) (citations omitted). In furtherance of this secrecy, Rule 6(d) sets forth who can be present while the grand jury is i......
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2 books & journal articles
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    • ABA Antitrust Library Antitrust Evidence Handbook
    • 1 Enero 2016
    ...not violate Federal Rule of Criminal Procedure 6(e)), with In re Grand Jury Subpoenas Dated Feb. 28, 2002, March 26, 2003, Oct. 4, 2004, 472 F.3d 990, 997 (8th Cir. 2007) (“[W]hile the grand jury disclosure rules do not prevent the same Government attorney from working on both a criminal an......
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    • ABA Antitrust Library Antitrust Evidence Handbook
    • 1 Enero 2016
    ...No. 01-1975, 2001 WL 1356363 (1st Cir. Nov. 8, 2001), 89 In re Grand Jury Subpoenas Dated Feb. 28, 2002, March 26, 2003, Oct. 4, 2004, 472 F.3d 990 (8th Cir. 2007), 130 In re Grand Jury Subpoenas, 144 F.3d 653 (10th Cir. 1998), 113 Table of Cases 313 In re Grand Jury Subpoenas, 902 F.2d 244......

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