Proceedings Before Federal Grand Jury for Dist. of Nevada, In re

• Decision Date: 23 April 1981
• Docket Number: No. 79-4276,79-4276
• Parties: In re PROCEEDINGS BEFORE the FEDERAL GRAND JURY FOR the DISTRICT OF NEVADA. UNITED STATES of America, Plaintiff-Appellee, v. Joseph CONFORTE and Sally Conforte, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 641

643 F.2d 641

In re PROCEEDINGS BEFORE the FEDERAL GRAND JURY FOR the DISTRICT OF NEVADA UNITED STATES of America, Plaintiff-Appellee, v. Joseph CONFORTE and Sally Conforte, Defendants-Appellants.

No. 79-4276.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Jan. 12, 1981.

Decided April 23, 1981.

Stanley H. Brown, Reno, Nev., on brief; Harvey D. Tack, Hochman, Salkin & DeRoy, Beverly Hills, Cal., argued, for defendants-appellants.

Gilbert E. Andrews, Dept. of Justice, Washington, D.C., on brief; William A. Whitledge, Atty., Dept. of Justice, Washington, D.C., argued, for plaintiff-appellee.

On Appeal from the United States District Court for the District of Nevada.

Before WALLACE and POOLE, Circuit Judges, and SMITH, ^* District Judge.

POOLE, Circuit Judge:

Joseph and Sally Conforte appeal an order of the United States District Court for the District of Nevada permitting disclosure to the Internal Revenue Service of evidence produced before a federal grand jury during its investigation of them.

On April 5, 1977, a federal grand jury returned a ten-count indictment against the Confortes. The indictment charged that they had attempted to evade payment of federal withholding taxes by misrepresenting the amount of the wages paid to some employees and by failing to file employer's quarterly federal tax returns. Each was convicted on four counts; their convictions were upheld on appeal to this court. United States v. Conforte, 624 F.2d 869 (9th Cir. 1980).

On March 21, 1979, the United States Attorney for the District of Nevada filed an ex parte motion in the district court requesting disclosure to the Internal Revenue Service of the evidence produced before the grand jury that indicted the Confortes. In an order entered that day, the district court directed that "all transcripts of all witnesses and all documents, records and exhibits" that were submitted to the grand jury "be made available and disclosed to the Internal Revenue Service and its attorneys for use, including disclosure for discovery purposes and in conjunction with any Court proceeding, in connection with pending civil litigation before the United States Tax Court, ... collecting civil tax liabilities, and in making any additional civil determinations where required by law."

Without seeking to intervene before the district court or to petition that court for any sort of relief from the order, the Confortes filed notice of appeal from the order on March 26, 1979. They now seek reversal of the district court's disclosure order and ask that the matter be remanded to the district court. Their appeal raises issues of mootness and finality, and of when disclosure to government agencies is appropriate. We decline to discuss these issues because we conclude that the Confortes do not have standing to appeal. ¹

The general rule is well settled: persons who were not parties of record before the district court may not appeal that court's order or judgment except in extraordinary circumstances. Securities Exchange Commission v. Lincoln Thrift Association, 577 F.2d 600, 602 (9th Cir. 1978); Coffey v. Whirlpool Corp., 591 F.2d 618, 619 (10th Cir. 1979); Moten v. Bricklayers, Masons and Plasterers International Union, 543 F.2d 224, 227 (D.C.Cir.1976). Courts have taken a case-by-case approach to the determination whether an appellant may proceed if he was not a party before the court from whose order he appeals. However, in nearly every case where such an appeal was allowed to proceed, two elements were present: (1) the appellant had participated in the district court proceedings even though not a party, and (2) the equities of the case weighed in favor of hearing the appeal. See, e.g., Brown v. Board of Bar Examiners of State of Nevada, 623 F.2d 605, 608 (9th Cir. 1980); Petrol Stops Northwest v. United States, 571 F.2d 1127, 1128-29 (9th Cir. 1978), rev'd on other grounds sub nom. Douglas Oil Co. v. Petrol Stops Northwest, 441 U.S. 211, 99 S.Ct. 1667, 60 L.Ed.2d 156 (1979); West v. Radio-Keith-Orpheum Corp., 70 F.2d 621, 624 (2d Cir. 1934). ²

The Confortes' case presents no reason for deviation from the general rule. They made no effort to appear before the district court; rather, upon learning of the ex parte disclosure proceeding, they immediately brought an appeal to this court. This appeal was not their only means of redress. Indeed, it was not their best means. They might have sought to intervene in the district court under Fed.R.Civ.P. 24(c) to request reconsideration of the disclosure order. Denial of such a motion would have been appealable. On the other hand, had the motion been granted, the Confortes would have become parties, litigated their...