Sealed Case, In re

• Citation: 266 U.S.App.D.C. 30,832 F.2d 1268
• Decision Date: 06 November 1987
• Docket Number: No. 87-5256,87-5256
• Parties: , 56 USLW 2283 In re SEALED CASE.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1268

832 F.2d 1268

266 U.S.App.D.C. 30, 56 USLW 2283

In re SEALED CASE.

No. 87-5256.

United States Court of Appeals District of Columbia Circuit.

Argued Sept. 3, 1987.

Decided Nov. 6, 1987.

N. Richard Janis, with whom Lawrence H. Wechsler and Clement R. Gagne, III, Washington, D.C., was on the brief for appellant.

Paul L. Friedman, with whom Lawrence E. Walsh, Washington, D.C., Guy Miller Struve, New York City, William T. Hassler and Jeffrey Toobin, Washington, D.C., were on the brief for appellee.

Before HARRY T. EDWARDS, BUCKLEY and D.H. GINSBURG, Circuit Judges.

Opinion for the Court filed by Circuit Judge EDWARDS.

HARRY T. EDWARDS, Circuit Judge:

The appellant in this matter is a witness in a grand jury investigation presided over by Independent Counsel Lawrence Walsh. The District Court empaneled the grand jury to investigate possible violations of United States law by persons secretly selling arms to Iran and providing assistance to the Nicaraguan Contras. The appellant ("Witness") appeals a decision of the District Court holding him in contempt for failure to comply with a subpoena duces tecum issued by the grand jury.

The subpoena in question directed the Witness to produce, in his capacity as "custodian," various documents pertaining to the operations of eight foreign companies with which he was allegedly associated and whose records he allegedly controls. The Witness contends that, because the subpoena was addressed to him in a representative capacity, the District Court erred in holding that the Independent Counsel need only establish that the court had personal jurisdiction over the Witness. We agree. The Independent Counsel must show that the District Court has personal jurisdiction over each of the companies whose records it seeks in order to obtain an order directing the Witness to comply with the subpoena. Because the Independent Counsel has not yet made the requisite showing, we reverse the District Court's order and remand for further consideration of the court's jurisdiction over the eight companies.

We further hold that, pursuant to the Supreme Court's decisions in Fisher v. United States, 425 U.S. 391, 96 S.Ct. 1569, 48 L.Ed.2d 39 (1976), and United States v. Doe, 465 U.S. 605, 104 S.Ct. 1237, 79 L.Ed.2d 552 (1984), the Witness may properly invoke his Fifth Amendment privilege in refusing to produce the subpoenaed documents if he can show that the testimonial implications of his production of the documents--i.e., with respect to his alleged representative capacity, the existence or authenticity of the documents, or his possession or control of them--might tend to incriminate him. Once the Witness makes such a showing, the Independent Counsel is only entitled to an order requiring him to produce the subpoenaed documents if it can demonstrate that those possibly incriminatory facts to which the Witness would implicitly testify by producing the documents are a "foregone conclusion," or if the Independent Counsel grants the Witness use immunity with respect to the testimonial aspects of his production of the companies' records.

This case is under seal. In order to preserve the secrecy of the grand jury's investigation, we refrain from naming the Witness or the companies whose records have been subpoenaed.

I. BACKGROUND

On January 28, 1987, the District Court empaneled a grand jury to investigate possible violations of United States law by Government officials and those who assisted them in surreptitiously selling arms to Iran and secretly funneling money and supplies to the Nicaraguan Contras. Two days later, the grand jury issued a subpoena to the Witness requiring the production of, inter alia, many of the documents whose disclosure is here at issue. The Independent Counsel was unable to serve the subpoena for several months due to the Witness' absence from the United States. After a mutually acceptable method of service was agreed upon, the grand jury issued a new subpoena duces tecum on April 30, 1987, and service was made the following day. The subpoena ordered the Witness, as "custodian" for eight foreign companies, ¹ to produce certain documents on May 6. The order read:

Bring with you any and all documents related to the business of the following corporations, including but not limited to corporate registration papers, incorporation papers, minutes of all meetings, financial records, bank account records, telephone records, personnel records, payroll records, and any record, note, memorandum or other document or thing associated with the business of [eight named foreign companies].

The Witness refused to comply with the subpoena. On May 6, 1987, the Independent Counsel filed a motion with the District Court to compel production of the requested documents. The Witness opposed the motion, contending that the subpoena suffered from five principal infirmities, any one of which would suffice to invalidate it. First, the Witness claimed that the District Court lacked personal jurisdiction over the eight companies, and that, because the Witness had been served in his representative capacity as "custodian" rather than in his individual capacity, personal jurisdiction over the companies was essential to render compliance mandatory. Second, the Witness argued that the Treaty on Mutual Assistance in Criminal Matters between the United States and Switzerland, May 25, 1973, United States-Switzerland, 27 U.S.T. 2019, T.I.A.S. No. 8302, furnished the sole avenue for obtaining at least some of the subpoenaed documents, and that more general notions of international comity precluded enforcement of a subpoena to obtain business records protected by the secrecy laws of other nations. Third, the Witness invoked the Fifth Amendment's privilege against compelled self-incrimination on the ground that the testimonial significance of his production of the documents--as opposed to the contents of the documents, with respect to which he asserted no privilege--might tend to incriminate him. Fourth, the Witness urged that the subpoena was impermissibly broad. Finally, the Witness challenged the legal authority of the Independent Counsel who had supervised the grand jury that had issued the subpoena.

The District Court granted the Independent Counsel's motion, rejecting all of the Witness' objections. See In re Grand Jury Subpoena, Misc. No. 87-0137 (D.D.C. July 10, 1987), reprinted in Joint Appendix ("J.A.") 76. The District Court first ruled that it had jurisdiction to enforce the subpoena simply because it had personal jurisdiction over the Witness; whether it had personal jurisdiction over the companies the court deemed irrelevant. The court then held that the Treaty on Mutual Assistance in Criminal Matters did not preclude the issuance of a subpoena in this case. It did not address the Witness' related argument that international comity required the court to stay its hand. The District Court also rejected the Witness' Fifth Amendment claim, finding it to be based on a misreading of Fisher and Doe. The court held that under the collective-entity exception to the Fifth Amendment privilege against compelled self-incrimination, reaffirmed most recently by the Supreme Court in Bellis v. United States, 417 U.S. 85, 94 S.Ct. 2179, 40 L.Ed.2d 678 (1974), a custodian of a collective entity's documents could not assert a personal Fifth Amendment privilege to refuse to produce them in response to a subpoena. In the court's judgment, this rule survived Fisher and Doe. Because the Witness had been served as custodian for the companies whose records the Independent Counsel had demanded, the District Court decided that the Fifth Amendment did not excuse noncompliance. The court further adjudged the subpoena "clear in its demands and not unduly burdensome." J.A. 80. It upheld the authority of the Independent Counsel in another case decided that same day. See In re Sealed Case, 666 F.Supp. 231 (D.D.C.1987). The court therefore ordered the Witness to hand over the documents.

Pursuant to a stipulation of the parties entered into on July 17, 1987, and approved by the District Court on July 21, the return date for the subpoena was set for July 29, 1987. On July 28, the Witness informed the court that he would not comply with its order. Following a hearing on July 30, the District Court found the Witness in contempt pursuant to 28 U.S.C. Secs. 1826 and 1784 (1982) for failure to produce the records requested in the subpoena or to cause an alternative custodian to produce them. The court ordered the Witness confined for the life of the grand jury or until he complied with the District Court's order of July 10, 1987, unless the Witness sought an immediate appeal. The Witness filed a Notice of Appeal with this court on August 5, reiterating the five arguments he advanced in the trial court.

II. ANALYSIS

A. Personal Jurisdiction

The subpoena was issued to the Witness as a representative of the eight companies whose records the Independent Counsel wishes to obtain. As the District Court correctly noted in the Memorandum accompanying its Order of July 10, 1987, "[h]ad the corporations themselves been subpoenaed, clearly the Independent Counsel would have had to establish that the Court had in personam jurisdiction over them." J.A. 77. The Independent Counsel contends, however, that because the subpoena was addressed to the Witness as "custodian" for the companies, rather than to the companies themselves, and because the District Court unquestionably had personal jurisdiction over the Witness since he is a United States citizen, the Independent Counsel need not prove that the court had jurisdiction over the companies. The District Court agreed. Personal jurisdiction over a company's representative suffices, it held, to order compliance with a subpoena requesting production of the company's records, regardless of whether the company itself has any connection with the United States. J.A. 77.

The District Court...