October 1985 Grand Jury No. 746, In re, 86-306

• Decision Date: 04 March 1987
• Docket Number: No. 86-306,86-306
• Citation: 507 N.E.2d 6,154 Ill.App.3d 288,107 Ill.Dec. 342
• Parties: , 107 Ill.Dec. 342 In re OCTOBER 1985 GRAND JURY NO. 746.
• Court: United States Appellate Court of Illinois

Page 6

507 N.E.2d 6

154 Ill.App.3d 288, 107 Ill.Dec. 342

In re OCTOBER 1985 GRAND JURY NO. 746.

No. 86-306.

Appellate Court of Illinois First District, Third Division.

March 4, 1987.

Rehearing Denied April 20, 1987.

Neil F. Hartigan, Atty. Gen., Chicago, Roma J. Stewart, Sol. Gen., Mark L. Rotert, Joan G. Flickinger, Asst. Attys. Gen., for plaintiff-appellant.

Carlo E. Poli, Allen C. Engerman, Barry A. Erlich, Engerman & Erlich, Ltd., Chicago, for defendant-appellee.

Presiding Justice McNAMARA delivered the opinion of the court:

The State appeals from an order of the trial court quashing a subpoena duces tecum issued to Bernard Drebin, an accountant, during the course of grand jury proceedings investigating Drebin's clients, Jack and Wanda Bernstein.

The Illinois Attorney General initiated a grand jury investigation of the Bernsteins for the alleged failure to pay the proper amount of retailers' occupation tax for the years 1982-84. As a part of its investigation, the grand jury issued a subpoena to Drebin, the Bernsteins' accountant. The subpoena called for production of retained copies of U.S. income tax returns prepared by Drebin for the Bernsteins personally and d/b/a/ Milwaukee products. The subpoena also called for production of any written material provided to Drebin by the Bernsteins and used by Drebin in preparing the Bernsteins' tax returns, and any workpapers prepared and used by Drebin in preparation of the tax returns for the years in question.

When Drebin appeared before the grand jury and was asked about the Bernsteins and their tax returns, Drebin refused to answer the questions asserting the Illinois Accountant as witness provision of the Illinois Public Accounting Act. (Ill.Rev.Stat.1985, ch. 111, par. 5533.) This provision makes privileged any information or evidence obtained by an accountant in his confidential capacity as a public accountant.

The State then terminated the interrogation and appeared before the trial court to seek entry of a Rule to Show Cause against Drebin as to why he should not be held in contempt. The trial court declined to issue the Rule and requested that the parties present the issue in the form of a motion to quash. Drebin filed a motion to quash the subpoena duces tecum. After considering briefs and hearing oral argument, the trial court granted Drebin's motion to quash. The State appeals.

Before reaching the merits, we must address Drebin's challenge to the State's authority to bring this appeal. Drebin relies on In re February 1970 Cook County Grand Jury (1970), 46 Ill.2d 448, 263 N.E.2d 832, where our supreme court dismissed the appeal of two orders, one suppressing evidence illegally obtained by the grand jury pursuant to a subpoena, and the second order quashing a subpoena duces tecum issued in the grand jury proceedings. In that case, the State predicated its right to review on Supreme Court Rule 604(a)(1), which permits appeals by the State from orders suppressing evidence in criminal cases. (87 Ill.2d R. 604(a)(1).) In dismissing the appeal, the court held that "a grand jury investigation is not a criminal case within the meaning of Rule 604(a)(1), and that appeal is not the proper vehicle for review of the challenged orders." 1970 Cook County Grand Jury, 46 Ill.2d 448, 450, 263 N.E.2d 832.

By its holding in 1970 Cook County Grand Jury, the court has apparently foreclosed the possibility of appealing orders issued in the course of grand jury proceedings under Rule 604(a)(1). We do not believe, however, that the court intended to foreclose all possibility of appeal of this type of order. There, the court relied upon People v. Ryan (1951), 410 Ill. 486, 103 N.E.2d 116, cert. denied (1952), 343 U.S. 964, 72 S.Ct. 1057, 96 L.Ed. 1361, for the proposition that a grand jury proceeding is not a criminal case, but is a secret investigation which may or may not result in the commencement of criminal proceedings. People v. Ryan is also cited in the Joint Committee Comments to section 2-1101 of the Illinois Code of Civil Procedure. (Ill.Rev.Stat.1985, ch. 110, par. 2-1101.) Section 2-1101 provides that a court may quash or modify any subpoena for good cause shown. The Committee Comments cite People v. Ryan to show that section 2-1101 is merely a codification of existing law. Therefore, in the present case, the trial court had the authority to quash the subpoena at issue under section 2-1101. The State contends that because the court's authority to quash the subpoena is found in the civil code, that order may be appealed under the rules applicable to civil appeals. Supreme Court Rule 301 states that every final judgment of a circuit court in a civil case is appealable as of right. 87 Ill.2d R. 301.

We also note other orders issued in the course of grand jury proceedings where this court has allowed appeal before the proceedings have reached the stage of an actual criminal case. When a witness subpoenaed by a grand jury refuses to testify or produce evidence, he may be held in contempt. The judgment holding a witness in contempt by the trial court is appealable. (See e.g., People v. Bickham (1980), 90 Ill.App.3d 897, 46 Ill.Dec. 315, 414 N.E.2d 37; In re Grand Jury Investigation of Donald Swan (1981), 92 Ill.App.3d 856, 48 Ill.Dec. 70, 415 N.E.2d 1354.) Similarly, appeal was allowed in In re Extended March 1975 Grand Jury No. 655 (1980), 84 Ill.App.3d 847, 40 Ill.Dec. 84, 405 N.E.2d 1176. In that case, this court allowed appeal from a trial court order denying a petition which sought release of grand jury evidence. The appellants sought the evidence for use in a civil case pending in federal court. In our estimation, neither a judgment holding a witness in contempt nor an order denying release of grand jury evidence is more of a criminal case within the meaning of Rule 604(a)(1) than an order quashing a grand jury subpoena duces tecum. Yet courts have allowed appeal of such orders without questioning the right to appeal. Such trial court orders pertaining to grand jury matters are the result of independent proceedings involving a witness or evidence before a grand jury before the proceedings have reached the point of actually being a criminal case. Because such appeals are consistently allowed, we do not believe that our supreme court intended to foreclose all appeal of orders issued in the course of grand jury proceedings.

Whether an order constitutes a final judgment for purposes of Rule 301 must be determined upon consideration of the specific nature of the controversy and the effect of the order upon that controversy. (People ex rel. Pollution Control Board v. Lloyd A. Fry Roofing Co. (1972), 4 Ill.App.3d 675, 281 N.E.2d 757.) An order which in substance finally adjudicates the rights of the parties and terminates the litigation is final and appealable. (Myers v. Myers (1977), 51 Ill.App.3d 830, 9 Ill.Dec. 603, 366 N.E.2d 1114.) Generally, orders entered pursuant to discovery rules are interlocutory and not immediately appealable. As preliminary orders in a pending case, discovery orders are reviewable on appeal from the final order in that case. (People ex rel. Scott v. Silverstein (1981), 87 Ill.2d 167, 57 Ill.Dec. 585, 429 N.E.2d 483.) Where, however, a discovery order finally concludes a proceeding begun against a witness, the order is final even though entered in the context of another proceeding, due to the separate and independent nature of the proceeding involved. People ex rel. Scott v. Silverstein.

The case before us is similar to Laurent v. Brelji (1979), 74 Ill.App.3d 214, 30 Ill.Dec. 164, 392 N.E.2d 929, where this court held an order compelling compliance with an administrative subpoena to be final and appealable. The recipient of the subpoena was not a party to the administrative hearings. The court distinguished this order from other discovery orders by pointing out that after the court ordered the recusant witness to testify and produce the records, the proceeding before it was terminated. The court noted that in that sense it was distinguishable from other discovery orders entered in a cause pending in the same court. The order of the court finally determined the rights of the parties before it and terminated the litigation. (See Ellis v. Interstate Commerce Com. (1915), 237 U.S. 434, 35 S.Ct. 645, 59 L.Ed. 1036.) Preliminary orders in a pending suit are not appealable because they are reviewable on appeal from the final order in the suit. In the present case, as in Laurent, there is no suit pending. Additionally, appellate review of the order before us should be allowed to resolve an important issue completely separate from and collateral to the merits of the ongoing grand jury proceedings. See In re Grand Jury Investigation of Ocean Transp. (D.C.Cir.), 604 F.2d 672, cert. denied (1979), 444 U.S. 915, 100 S.Ct. 229, 62 L.Ed.2d 169.

We are aware of the rule that an order denying a motion to quash a grand jury subpoena duces tecum is not a final judgment and not appealable. (United States v. Ryan (1971), 402 U.S. 530, 91 S.Ct. 1580, 29 L.Ed.2d 85; Cobbledick v. United States (1940), 309 U.S. 323, 60 S.Ct. 540, 84 L.Ed. 783.) As pointed out in Ryan, 402 U.S. at 532, 91 S.Ct. at 1581, "one to whom a subpoena is directed may not appeal the denial of a motion to quash that subpoena but must either obey its commands or refuse to do so and contest the validity of the subpoena if he is subsequently cited for contempt on account of his failure to obey." Granting of a motion to quash, however, does not afford the possibility of disobedience and subsequent contempt review. What is critical is whether the party unsuccessfully seeking the subpoena has any other means of obtaining review. If the present order is held nonappealable, the only other opportunity for review of the subpoena would be if and when there is a final decision in the State's proceedings against the Bernsteins. At that stage, review of the accountant privilege s...