Special Grand Jury 89-2, In re, 98-1073

• Decision Date: 30 April 1998
• Docket Number: No. 98-1073,98-1073
• Citation: 143 F.3d 565
• Parties: 98 CJ C.A.R. 2157 In re SPECIAL GRAND JURY 89-2
• Court: U.S. Court of Appeals — Tenth Circuit

Page 565

143 F.3d 565

98 CJ C.A.R. 2157

In re SPECIAL GRAND JURY 89-2

No. 98-1073.

United States Court of Appeals Tenth Circuit.

April 30, 1998.

Douglas N. Letter, Peter R. Maier, Civil Div., Appellate Staff, U.S. Dept. of Justice, Washington, DC, for United States of America.

Maria T. Vullo, Paul, Weiss, Rifkind, Wharton & Garrison, New York City, Hartley David Alley, Wheat Ridge, CO, for James S. Stone.

Harold A. Haddon, Rachel A. Bellis, Haddon, Morgan & Foreman, P.C., Denver, CO, for Rockwell Intern. Corp.

John M. Richilano, Richilano & Ridley, P.C., Denver, CO, for Intervenor-Appellant; David B. Harrison, Miller & Harrison, LLP, Boulder, CO, for Intervenor-Appellant; and David A. Lane of Miller, Lane, Killmer & Greisen, LLP, Denver, CO, for Intervenor-Appellant.

Forrest W. Lewis, Forrest W. Lewis, P.C., Denver, CO, for Intervenor-Appellant John Doe No. 1; Larry Pozner, Larry Pozner, P.C., Denver, CO, for Intervenor-Appellant John Doe No. 2; Vincent J. Marella, Bird, Marella, Boxer, Wolpert & Matz, Los Angeles, CA, for Intervenor-Appellant John Doe No. 3.

Brian K. Holland and Jeffrey S. Pagliuca, Holland, Kaplan & Pagliuca, P.C., Denver, CO, for Intervenors-Appellants.

Before ANDERSON, BALDOCK and LUCERO, Circuit Judges.

PER CURIAM.

This is an appeal from a district court order releasing, for use in a civil case, transcripts of the grand jury testimony of potentially all witnesses who testified before the grand jury, based on a showing of need for the testimony of only three witnesses. ¹ We reverse the district court's decision, holding that: (1) a district court must evaluate the need for disclosure of grand jury testimony on a witness-by-witness basis; and (2) before releasing transcripts, the district court must conduct an in camera review in order to limit the disclosure to the claimed need and make appropriate redactions.

BACKGROUND

United States ex rel. Stone v. Rockwell Int'l Corp., Dist. Ct. No. 89-CV-1154, the qui tam action in which litigants wish to use grand jury testimony, concerns defendant Rockwell International Corporation's operation of the Rocky Flats Nuclear Weapons Plant (Rocky Flats) near Golden, Colorado, under contract with the United States Department of Energy from 1975 through 1989. Plaintiff James S. Stone filed his complaint in July 1989, alleging that Rockwell violated the False Claims Act, see 31 U.S.C. § 3729, by concealing and misrepresenting its environmental and safety performance in submissions for payment. See United States ex rel. Stone v. Rockwell Int'l Corp., 950 F.Supp. 1046, 1047 (D.Colo.1996), aff'd, 124 F.3d 1194 (10th Cir.1997), cert denied, 66 U.S.L.W. 3492 (U.S. Apr. 27, 1998) (No 97-1178). ² The Criminal Division of the Department of Justice had opened an investigation into similar allegations. Special Grand Jury 89-2 was convened in August 1989, but before it completed the investigation, Rockwell entered a guilty plea to an information charging ten environmental crimes. See id. The grand jury was discharged in March 1992. See In re Grand Jury Proceedings, Special Grand Jury 89-2, 813 F.Supp. 1451, 1456 (D.Colo.1992).

In November 1996, the district court permitted the government to intervene in Stone's qui tam action. See Stone, 950 F.Supp. at 1049. A scheduling conference was held on December 5, 1997, at which discovery deadlines were imposed, the parties were limited to forty-five post-government intervention depositions, and trial was set to begin July 6, 1998.

Stone then filed this action to obtain access to grand jury testimony. He sought disclosure of the testimony of ninety-eight persons whom he believed were "knowledgeable" on subjects "at the heart" of the qui tam case. Vullo Aff., Ex. 1 at 2. Stone's primary claim was that release of the transcripts would prevent injustice in the qui tam action by providing a means to refresh witnesses' memories. ³ He asserted that, at their depositions, key witnesses were having difficulty recalling details of important events. See id. at 2-6. The assertion was supported with excerpts from deposition transcripts showing that nine individuals admitted varying degrees of memory loss in response to some questions. ⁴ Stone also submitted memoranda documenting earlier interviews of these individuals, reflecting a more detailed recollection at the time of the special grand jury investigation.

The disclosure matter was assigned to the trial judge in the qui tam action. On February 10, 1998, he heard argument in support of disclosure from counsel for Stone and a trial attorney from the civil division of the United States Department of Justice (DOJ). The DOJ civil attorney joined Stone's motion and added a contention that disclosure was necessary to test the credibility of witnesses, as exemplified by one individual's deposition statement that he wished to "recant" information in a debriefing memorandum. Appellants' Joint Mot. for Stay, Ex. B at 6-8. Rockwell argued against the motion, claiming that Stone was making a wholesale request for disclosure without the requisite showing of particularized need. However, Rockwell also requested disclosure of the testimony of individuals it wished to depose.

The district court did not ascertain how many individuals on the list of ninety-eight witnesses had actually testified before the grand jury and would be called for deposition or trial testimony under the limitations imposed in pre-trial orders in the civil case. It was plain that the district court believed that a review of grand jury transcripts would require a major investment of time. On appeal, however, it became clear that the task was not nearly as onerous as the district court contemplated. In fact, the requested disclosure could be limited to as few as nine persons.

Based on the information submitted by Stone and the DOJ, the district court judge made his ruling. He found that the deposition excerpts established particularized need for the grand jury testimony of those specific persons, see id. at 19, and observed that he would "be very surprised if somebody had an accurate memory of something that happened ten years ago in the kind of detail that's going to be necessary for testimony at trial," id. at 20. He ordered disclosure of the grand jury testimony of all witnesses that any party in the qui tam action had deposed intended to depose, or intended to call at trial. The transcripts were to be redacted so that the disclosure was limited to witness testimony on relevant issues. In addition, the court imposed a protective order so that the material could be used only for the purposes of the qui tam litigation.

The court's written order established disclosure and redaction procedures and formalized the protective order. The following steps were required for release of transcripts: (1) counsel for the parties were to provide to the United States Attorney lists of witnesses, prioritized in order of deposition date; (2) the United States Attorney was to redact portions of grand jury transcript containing comment by the prosecutors or grand jurors, then provide to the parties' representatives one copy of the redacted transcripts; and (3) the parties' representatives were to review the redacted transcripts to excise portions of the transcript unrelated to the issues of pondcrete, saltcrete, spray irrigation, the sewage treatment plant, or the awards fee process to reach a "final redacted transcript" for use in the prosecution or defense of the qui tam action. Id.; Ex. C at 3-4.

Several persons moved to intervene and request reconsideration of the disclosure order. Intervenors John Does Nos. 1, 2, and 3 were targets of the grand jury investigation; other intervenors were Rockwell employees who had testified before the grand jury and will be deposed in the qui tam action. In opposing the motion for reconsideration, Stone provided excerpts from one intervenor's May 1995 deposition, showing some degree of memory loss.

At a hearing on the motion for reconsideration, held February 27, 1998, the court modified its previous ruling to allow witnesses to review their own transcripts. The court also stated that, later, it would work out a disclosure procedure for the grand jury testimony of trial witnesses.

Rockwell and the intervenors appealed the order to this court and requested a stay pending appeal. On March 2, we issued a temporary stay. The parties provided expedited briefing on the stay motion and participated in a lengthy oral argument on April 1. At oral argument, the parties agreed that this court reviews the merits of the district court's order under the abuse of discretion standard, see In re Grand Jury 95-1, 118 F.3d 1433, 1437 (10th Cir.1997), and conceded that they had no additional legal argument to place before this court. We now resolve the merits of this dispute. ⁵

DISCUSSION

The Supreme Court has consistently "recognized that the proper functioning of the grand jury system depends upon the secrecy of the grand jury proceedings." Douglas Oil Co. v. Petrol Stops Northwest, 441 U.S. 211, 218, 99 S.Ct. 1667, 1672, 60 L.Ed.2d 156 (1979). Secrecy, however, is not absolute. Rule 6(e) of the Federal Rules of Criminal Procedure provides exceptions to the general rule. Under Fed.R.Crim.P. 6(e)(3)(C)(i), grand jury materials may be disclosed "when so directed by a court preliminarily to or in connection with a judicial proceeding."

A district court may properly order release of grand jury materials after a party demonstrates the necessity for them "with particularity." United States v. Procter & Gamble Co., 356 U.S. 677, 682, 78 S.Ct. 983, 986-87, 2 L.Ed.2d 1077 (1958). The determination involves balancing competing interests that differ from case-to-case:

Specifically, a party seeking grand jury materials must show (1) the materials are needed to avoid a possible injustice in another judicial proceeding, (2) the need for disclosure is greater than the need for continued secrecy, and (3) the...