U.S. v. Tager, 79-1691

• Decision Date: 20 October 1980
• Docket Number: No. 79-1691,79-1691
• Citation: 638 F.2d 167
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Ariel Henry TAGER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 167

638 F.2d 167

UNITED STATES of America, Plaintiff-Appellee, v. Ariel Henry TAGER, Defendant-Appellant.

No. 79-1691.

United States Court of Appeals, Tenth Circuit.

Argued July 9, 1980.

Decided Oct. 20, 1980.

James R. Wyrsch of Koenigsdorf, Kusnetzky & Wyrsch, Kansas City, Mo., for defendant-appellant.

Michael DeFeo, Atty., U. S. Dept. of Justice, Kansas City, Mo. (James P. Buchele, U. S. Atty., Topeka, Kan., David B. B. Helfrey and Grover G. Hankins, Attys., U. S. Dept. of Justice, Kansas City, Mo., on brief), for plaintiff-appellee.

Before SETH, Chief Judge, and HOLLOWAY and SEYMOUR, Circuit Judges.

SETH, Chief Judge.

This appeal arises from the conviction of appellant for mail fraud. 18 U.S.C. § 1341. The government alleged a scheme involving many people, including doctors, lawyers, and automobile repairmen, who were engaged in defrauding insurance companies. Appellant, an attorney, was indicted and prior to trial he moved to dismiss the indictment and to suppress certain evidence. The motions were denied, and it is from the denial of these motions that Mr. Tager appeals.

The relevant facts are as follows. The investigation leading to the indictment herein at issue was started by a Mr. Edward House employed by the Insurance Crime Prevention Institute (ICPI). The ICPI is an organization funded by over 300 insurance companies to investigate possible frauds against insurance companies. Neither the ICPI nor Mr. House was in any official position whatever. Mr. House worked as an investigator of ICPI and developed sufficient evidence to refer this case to the United States Postal Inspection Service. Thereafter he continued to assist in the investigation at the government's invitation.

A grand jury was convened in Kansas City, Kansas. The government moved for disclosure to Mr. House of certain grand jury materials to enable him further to assist in the investigation. The motion was made under Fed.R.Crim.P. 6(e) (3)(C)(i) (then Rule 6(e)(2)(C)(i)). The trial judge who heard the motion granted it and ordered the requested disclosure. The investigation was subsequently transferred from the Kansas City, Kansas grand jury to a grand jury in Topeka, Kansas. An indictment was returned against appellant and others in Topeka. As stated above, appellant moved to dismiss the indictment and to suppress evidence, but the motions were denied. The trial judge hearing these motions had misgivings as to whether the disclosure to Mr. House was authorized by Rule 6(e); however, he felt bound by the prior decision of the judge who originally authorized the disclosures. This second judge registered his misgivings in a thorough memorandum accompanying his order denying the motions. We have followed and rely to a large measure on his analysis.

The primary issue on appeal is whether the disclosure in these circumstances of grand jury materials to Mr. House was within the authority provided by Fed.R.Crim.P. 6(e). For the reasons that follow we conclude it was not.

The Federal Rules of Criminal Procedure prohibit generally the disclosure of "matters occurring before the grand jury." Fed.R.Crim.P. 6(e)(2). This rule codifies the long-standing policy of secrecy provided grand jury proceedings. The compelling policy reasons supporting this strict rule have been described in many cases. See, e. g., Douglas Oil Co. of California v. Petrol Stops Northwest, 441 U.S. 211, 99 S.Ct. 1667, 60 L.Ed.2d 156; Dennis v. United States, 302 F.2d 5 (10th Cir.); Bary v. United States, 292 F.2d 53 (10th Cir.); United States v. Rose, 215 F.2d 617, 628-29 (3d Cir.). This rule of secrecy "must not be broken except where there is a compelling necessity," shown with particularity. United States v. Proctor & Gamble Co., 356 U.S. 677, 682, 78 S.Ct. 983, 986, 2 L.Ed.2d 1077.

There are several exceptions to the rule of secrecy. These are for disclosure to a government attorney, Rule 6(e)(3)(A)(i); to government personnel assisting the government attorney, Rule 6(e)(3)(A)(ii); by court order preliminarily to or in connection with a judicial proceeding, Rule 6(e)(3)(C)(i); and to a criminal defendant under certain conditions, Rule 6(e)(3)(C)(ii). Inasmuch as Mr. House is neither a government attorney, government "personnel," nor a criminal defendant, subsections (A)(i), (A)(ii), and (C)(ii) are not applicable. Accordingly, the government argues the authority provided the court in subsection (C)(i) (in connection with a judicial proceeding) is sufficiently broad to encompass the disclosure to Mr. House ordered here.

As an initial concern we note that Mr. House did in fact review transcripts of the proceedings before the grand jury. The government conceded this at the hearing on the motions for dismissal and suppression. The government attorney stated: "The witness (Mr. House) will testify he has reviewed grand jury transcripts in this investigation. The government concedes that." VII Rec. at 117. The disclosure is therefore controlled by Rule 6(e), and United States v. Interstate Dress Carriers, Inc., 280 F.2d 52 (2d Cir.) (disclosure of material that does not reveal matters occurring before grand jury not controlled by Rule 6(e)), is inapposite.

Subsection (C)(i) excepts from the rule of secrecy disclosures "when so directed by a court preliminarily to or in connection with a judicial proceeding." The government contends that the grand jury proceedings in this case are "judicial proceedings" within the meaning of Rule 6(e)(3)(C)(i). The government cites several cases in support of this proposition. See United States v. Stanford, 589 F.2d 285 (7th Cir.); In re Grand Jury Witness Subpoenas, 370 F.Supp. 1282 (S.D.Fla.); In re Minkoff, 349 F.Supp. 154 (D.R.I.). Indeed, one court has termed this proposition "well settled." In re Braniff Airways, Inc., 390 F.Supp. 344, 346 (W.D.Tex.).

The proposition is hardly well settled. While the Minkoff court ruled that a grand jury proceeding was a "judicial proceeding" within the meaning of subsection (C)(i), it limited its power to order disclosure to discharged grand jury proceedings. The court conditioned its order granting disclosure upon the adjournment of the grand jury. The court said:

"Where termination is a condition of disclosure, it is obvious that such disclosure can neither help nor harm the completed investigation. In such circumstances I find I have the power to order disclosure, without deciding today the power of the court to order disclosure of grand jury minutes which would take effect before the dismissal of the grand jury."

In re Minkoff, 349 F.Supp. 154, 156-57 (D.R.I.). In addition, the disclosure was to a witness of her own testimony before the grand jury and not to an investigator to assist the investigation. Thus Minkoff provides no support for the government's position in this case. The grand jury proceedings here were in full force at the time disclosure was ordered.

Furthermore, the unanswered question in Minkoff was recently resolved by the same court in In re Grand Jury Proceedings, 445 F.Supp. 349 (D.R.I.), appeal dismissed, 580 F.2d 13 (1st Cir.) (nonappealable order). The court there held that it was without subsection (C)(i) power to order disclosure to state investigative personnel during an ongoing grand jury proceeding.

The government's reliance on In re Braniff Airways, Inc., 390 F.Supp. 344 (W.D.Tex.), and In re Grand Jury Witness Subpoenas, 370 F.Supp. 1282 (S.D.Fla.), is misplaced. The orders in those cases involved the disclosure to grand jury witnesses of transcripts of their own testimony before the ongoing grand jury. Both cases assumed the "judicial proceeding" requirement of subsection (C)(i) to be satisfied. The Braniff court then exercised its discretion in favor of disclosing transcripts of the witness' own testimony to that particular witness, given the unusual complexity and length of those proceedings. The Subpoenas court denied disclosure, finding that the movants had failed to show a particularized and compelling need for disclosure. We are not here faced with the disclosure of a witness' testimony to that witness during an ongoing grand jury proceeding. We therefore express no view as to the propriety of a (C)(i) order approving such a disclosure. It is enough for our purpose to observe that Braniff and Subpoenas offer little, if any, support for the government in this case.

Indeed, the Subpoenas court, the Southern District of Florida, denied a subsection (C)(i) motion for disclosure to state government personnel to assist in the investigation of an ongoing grand jury. In re Miami Federal Grand Jury No. 79-8, 478 F.Supp. 490 (S.D.Fla.). The court ruled that the government had failed to show a particularized and compelling need for disclosure, mere familiarity with the case and local expertise being insufficient to justify breaching the grand jury's veil of secrecy. For the purpose of deciding the case before it the Miami court was willing to assume that subsection (C)(i)'s "judicial proceeding" requirement was satisfied. The court observed, however, that "(t)o apply this provision to the very grand jury from which disclosure is sought seems somewhat illogical." Id. at 493.

The only case offered by the government which parallels the facts before us and arguably supports the government's position is United States v. Stanford, 589 F.2d 285 (7th Cir.), cert. denied, 440 U.S. 983, 99 S.Ct. 1794, 60 L.Ed.2d 244. There the Seventh Circuit held that the lower court properly ordered disclosure to state government personnel under subsection (C)(i) of proceedings occurring before an ongoing grand jury to assist the federal government in its investigation. The court decided that the "judicial proceeding" requirement was met. It then concluded that the lower court had not abused its discretion. It did not address the propriety of subsection (C)(i) disclosure to a private, nongovernmental investigator. And it is unclear whether the Stanford court would have...