United States v. First Western State Bank of Minot, ND

• Decision Date: 25 January 1974
• Docket Number: No. 73-1567.,73-1567.
• Citation: 491 F.2d 780
• Parties: UNITED STATES of America, Appellant, v. FIRST WESTERN STATE BANK OF MINOT, NORTH DAKOTA, et al., Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

491 F.2d 780 (1974)

UNITED STATES of America, Appellant, v. FIRST WESTERN STATE BANK OF MINOT, NORTH DAKOTA, et al., Appellees.

No. 73-1567.

United States Court of Appeals, Eighth Circuit.

Submitted December 11, 1973.

Decided January 25, 1974.

Rehearing and Rehearing Denied March 1, 1974.

Harold O. Bullis, U. S. Atty., Fargo, N. D., for appellant.

Kermit Edward Bye, Fargo, N. D., for appellees.

Before GIBSON and ROSS, Circuit Judges, and SMITH, Senior District Judge.^*

Rehearing and Rehearing En Banc Denied March 1, 1974.

GIBSON, Circuit Judge.

The United States appeals pursuant to 18 U.S.C. § 3731 from an order of the District Court suppressing any testimonies given by defendants Hayden Thompson, Herbert Meschke, Larry Erickson, Richard Backes, Gary Williamson, and Mark Purdy before the Ward County Grand Jury, North Dakota, and "any evidence relating thereto" in this federal charge under 18 U.S.C. § 610. The District Court ordered suppression of defendants' testimonies, any evidence relating to the testimonies, and any use of the testimonies by the Government in relation to defendants' trial in federal court.¹

This appeal presents only one basic issue: Did the Government establish that the evidence to be introduced in this federal prosecution against defendants had been developed from sources independent from defendants' testimonies before the state grand jury? A related issue arises on the scope of the immunity. Just because the defendants testified to certain facts before a state grand jury does not preclude the United States from presenting evidence of these same facts, if that evidence was secured or derived from sources independent from the immunized state testimony and if the immunized state testimony was not utilized to obtain leads to other incriminating evidence.

The defendants here claim that Kastigar v. United States, 406 U.S. 441, 92 S.Ct. 1653, 32 L.Ed.2d 212 (1972), and Murphy v. Waterfront Commission, 378 U.S. 52, 84 S.Ct. 1594, 12 L.Ed.2d 678 (1964), impose an almost impossible or insurmountable burden on the Government in prosecuting this case. The Government agrees with that contention, if Kastigar is interpreted in the District Court's manner. Since this case has profound implications in the enforcement of the criminal law, we think it advisable to set forth our views of the principles of Kastigar and Murphy as applied to the factual situation presented here.

The United States as a sovereign is not precluded from enforcing its laws by the grant of immunity of another sovereign, in this case the state. However, as a matter of fairness to the defendants and as a constitutional guarantee against self-incrimination, the state immunized testimony cannot be used, directly or indirectly, to prosecute a federal charge. Murphy v. Waterfront Commission, 378 U.S. at 79, 84 S.Ct. 1594. Because of the far-reaching effects of an order that suppresses vital testimony essential to the prosecution of a criminal charge and thus in effect grants amnesty to these defendants from a federal prosecution, a searching analysis of the purpose and reach of immunity statutes along with an analysis of the factual aspects of this prosecution is in order.

At common law the public had the right to anyone's testimony, but the Constitution protects against self-incrimination. Immunity statutes, long-embodied in our jurisprudential fabric, accommodate both of these values. Immunity is generally offered as a device to secure information on criminal activity committed by those in privy with or those acting in concert with the immunized witness.² Often lesser witnesses are induced to testify against more culpable offenders, who often are operating in the higher echelons of criminal activity. It is essentially a device to facilitate investigation of charges of corruption. Often immunity is utilized where no other legal means appears to be available or practical to ferret out facts best known to the culpable witnesses. The grant of use immunity does not clothe the witness with any aura of innocence or shield him from prosecution of the crimes inquired about, but only prohibits the use, directly or indirectly, of his testimony against him. This necessarily includes any leads that are derived from such testimony. Thus, where the same sovereign is granting the immunity and also prosecuting, that sovereign does have a heavy burden of showing that all of the essential evidence necessary for conviction was derived from independent sources. Admittedly, in that situation it may be almost impossible to separate immunized testimony and leads resulting therefrom from evidence secured from independent sources. But where the prosecuting sovereign is not the immunizing sovereign, a considerably different situation is presented.

The sovereign not offering immunity has the undeniable right to protect the integrity of its law enforcement prerogatives by prosecuting anyone who allegedly has committed an offense against its peace and dignity. When its own evidence and investigation discloses acts of criminal activity, an undeniable right to prosecute exits. This right cannot be controlled, thwarted, or diminished by another sovereign granting immunity from prosecution of a kindred offense. Fair play and constitutional guarantees demand, however, that the prosecuting sovereign not use, directly or indirectly, the immunized testimony or any fruits from it. Kastigar v. United States, supra; Murphy v. Waterfront Commission, supra. If the prosecuting sovereign has made its independent investigation and can show nonuse of the immunized testimony, either by lack of access to the immunized testimony or direct statements made in good faith that it did not use the immunized testimony, it should have a clear right to proceed with its own prosecution. However, under Kastigar and Murphy the prosecuting sovereign does have the burden of showing an independent source for its evidence.

Under the facts of this case, it would appear that the United States gathered a considerable amount of its evidence starting May 12, 1969, some five months prior to the convening of the state grand jury. During this interval, two federal grand jury sessions were held. Clearly and obviously, any evidence obtained during this period, even in conjunction with any state-federal investigation, antedated the state grant of immunity and should be available for use by the federal government. The Federal Bureau of Investigation reports prior to this date and the minutes of the two prior federal grand jury sessions irrefragably should be considered as independent sources. After the date of the state grant of immunity, closer scrutiny is required to ascertain if the immunized testimony was received or made available to the federal government or was used to obtain other incriminating evidence. Even if some questionable evidence was obtained, that should not preclude the United States from prosecuting if it can do so on the independent and untainted evidence it has secured. Any tainted evidence, of course, would be inadmissible and must be suppressed during the trial. We feel here that the Government should be permitted to make its case, since it claims, in good faith, independent and untainted sources for its evidence and further asserts nonaccess. The FBI reports and federal grand jury minutes should reveal two independent sources of the Government's evidence. This might be one of the many cases in which only a complete record can ultimately resolve all questions relating to the source of evidence.

With the above principles in mind, we examine the factual background of this appeal. A federal grand jury was convened in North Dakota commencing September 23, 1969, to investigate, inter alia, possible contributions by First Western State Bank of Minot, North Dakota (hereinafter Bank), some of its officers, and others, to elections of presidential or vice-presidential electors and members of Congress.³ Defendants did not testify before the federal grand jury, who returned a true bill on July 31, 1970, charging the Bank with five violations of 18 U.S.C. § 610 and the six individual defendants with willfully conspiring to cause the Bank to make contributions to certain federal elections.

Subsequent to the federal grand jury, the Ward County Grand Jury, North Dakota, was called into session October 14, 1969, to investigate the same alleged activity by defendants and others in relation to violations of the North Dakota Corrupt Practices Act, N.D.Cent.Code § 16-20-01 et seq. (1960). The state grand jury met from October 14, 1969, through December 8, 1969, and all invidivual defendants testified. Backes testified on October 23rd, Meschke on October 24th and 27th, Erickson on October 29th, Williamson on October 30th and December 3rd, Purdy on December 1st, and Thompson from December 1st through December 3rd. On December 8, 1969, the state grand jury charged each individual defendant with violating N. D.Cent.Code § 16-20-08 and § 16-20-09 for aiding, abetting, advising, or consenting in making unlawful political contributions. On March 9, 1970, a North Dakota state district court quashed defendants' indictment, since N.D.Cent. Code § 16-20-10 granted transactional immunity to defendants on their testimonies before the state grand jury concerning the charged violations. Defendants, however, still faced the above-described federal charges.

In the proceedings below on these federal charges, the defendants moved to quash the indictment because of purported immunity relating to defendants' testimonies before the state grand jury. Although this motion was originally denied on February 3, 1971, by the late Judge Register, defendants again brought the same motion on August 13, 1971. After oral arguments, the District Court on January 24, 1973, ordered a pretrial evidentiary hearing in order to allow the Government "an opportunity to meet the burden of proving that all of the evidence it...