United States v. Sells Engineering, Inc

• Decision Date: 30 June 1983
• Docket Number: No. 81-1032,81-1032
• Citation: 103 S.Ct. 3133,463 U.S. 418,77 L.Ed.2d 743
• Parties: UNITED STATES, Petitioner v. SELLS ENGINEERING, INC., et al
• Court: U.S. Supreme Court

77 L.Ed.2d 743

103 S.Ct. 3133

463 U.S. 418

UNITED STATES, Petitioner

v SELLS ENGINEERING, INC., et al.

No. 81-1032.

Argued March 2, 1983.

Decided June 30, 1983.

Syllabus

After respondents, a company having contracts with the Navy and company officials, were indicted by a federal grand jury for conspiracy to defraud the United States and tax fraud, the parties reached a plea bargain under which the individual respondents pleaded guilty to a count of conspiracy to defraud the Government by obst ucting an Internal Revenue Service investigation, and other counts against respondents were dismissed. Thereafter, the Government moved for disclosure of all grand jury materials to attorneys in the Justice Department's Civil Division, their paralegal and secretarial assistants, and certain Defense Department experts for use in preparing and conducting a possible civil suit against respondents under the False Claims Act. The District Court granted disclosure, concluding that Civil Division attorneys are entitled to disclosure as a matter of right under Federal Rule of Criminal Procedure 6(e)(3)(A)(i) (hereinafter (A)(i)), which authorizes disclosure of grand jury materials without a court order to "an attorney for the government for use in the performance of such attorney's duty." The court also stated that disclosure was warranted because the Government had shown particularized need for disclosure. The Court of Appeals vacated and remanded, holding (1) that Civil Division attorneys could obtain disclosure only by showing particularized need under Rule 6(e)(3)(C)(i) (hereinafter (C)(i)), which authorizes disclosure "when so directed by a court preliminarily to or in connection with a judicial proceeding," and (2) that the District Court had not applied a correct standard of particularized need.

Held:

1. Attorneys in the Civil Division of the Justice Department and their assistants and staff may not obtain automatic (A)(i) disclosure of grand jury materials for use in a civil suit, but must instead seek a (C)(i) court order for access to such materials. Pp. 427- 442.

(a) The automatic disclosure authorized by (A)(i) is limited to those attorneys who conduct the criminal matters to which the grand jury materials pertain. Rule 6(e) was not intended to grant free access to grand jury materials to government attorneys other than prosecutors, who perform a special role in assisting the grand jury in its functions and who must know what transpires before the grand jury in order to perform their own prosecutorial duties. Allowing automatic disclosure to nonprosecutors for civil use would increase the risk of inadvertent or illegal release of grand jury materials to others and render considerably more concrete the threat to the willingness of witnesses to come forward and testify fully and candidly before the grand jury; would pose a significant threat to the integrity of the grand jury itself by tempting prosecutors to manipulate the grand jury's powerful investigative tools to improperly elicit evidence for use in a civil case; and would threaten to subvert the limitations under federal laws applied outside the grand jury context on the Government's powers of discovery and investigation. Pp. 427-435.

(b) The fact that, when subparagraph 6(e)(3)(A)(ii) was added by Congress in 1977 to allow access to grand jury materials by nonattorneys assisting Government attorneys, (A)(ii) was limited to assisting the attorney in the "performance of [his] duty to enforce federal criminal law" does not establish that Congress intended to place the limitation to criminal matters on (A)(ii) disclosure but not on (A)(i) disclosure. The legislative history shows instead that Congress merely made explicit what it believed to be already implicit in (A)(i)'s language (which has been in the Rule since its inception in 1946). Congress' concerns that grand jury materials not be disclosed for civil use without a court order and that statutory limits on civil discovery not be subverted apply to disclosure for civil use by attorneys within the Justice Department as fully as to similar use by other Government agencies. Pp. 435-442.

2. A strong showing of particularized need for grand jury materials must be made before any (C)(i) disclosure will be permitted by court order. The party seeking disclosure must show that the material sought is needed to avoid a possible injustice in another judicial proceeding, that the need for disclosure is greater than the need for continued secrecy, and that the request is structured to cover only material so needed. Douglas Oil Co. v. Petrol Stops Northwest, 441 U.S. 211, 99 S.Ct. 1667, 60 L.Ed.2d 156. This standard governs disclosure to Government officials as well as to private parties, but is flexible and accommodates any relevant considerations, peculiar to Government movants, that weigh for or against disclosure in a given case. Here, the District Court's explanation of its finding of particularized need amounted to little more than its statement that the grand jury materials were rationally related to the civil fraud suit to be brought by the Civil Division, and the Court of Appeals correctly held that this was insufficient and remanded for reconsideration under the proper legal standard. Pp. 442-446.

642 F.2d 1184 (9th Cir.1981), affirmed.

Douglas N. Letter, Washington, D.C., for petitioner.

Arlington Ray Robbins, San Diego, Cal., for respondents.

BRENNAN, Justice.

The question in this case is under what conditions attorneys for the Civil Division of the Justice Department, their paralegal and secretarial staff, and all other necessary assistants, may obtain access to grand jury materials, compiled with the assistance and knowledge of other Justice Department attorneys, for the purpose of preparing and pursuing a civil suit. We hold that such access is permissible only when the Government moves for court-ordered disclosure under Federal Rule of Criminal Procedure 6(e)(3)(C)(i) and makes the showing of particularized need required by that Rule.

I

Respondents Peter A. Sells and Fred R. Witte were officers of respondent Sells Engineering, Inc. That company had contracts with the United States Navy to produce airborne electronic devices designed to interfere with enemy radar systems. In 1974, a Special Agent of the Internal Revenue Service began a combined criminal and civil administrative investigation of respondents. The Agent issued administrative summonses for certain corporate records of Sells Engineering. When the corporation refused to comply, the Agent obtained a district court order enforcing the summonses. Enforcement was stayed, however, pending appeal.

While the enforcement case was pending in the Court of Appeals, a federal grand jury was convened to investigate charges of criminal fraud on the Navy and of evasion of federal income taxes. The grand jury subpoenaed, and respondents produced, many of the same materials that were the subject of the IRS administrative summonses.¹ The grand jury indicted all three respondents on two counts of conspiracy to defraud the United States ² and nine counts of tax fraud.³ Respondents moved to dismiss the indictment, alleging grand jury misuse for civil purposes. Before the motion was decided, however, the parties reached a plea bargain. The individual respondents each pleaded guilty to one count of conspiracy to defraud the Government by obstructing an IRS investigation. All other counts were dismissed, and respondents withdrew their charges of grand jury misuse.

Thereafter, the Government moved for disclosure of all grand jury materials to attorneys in the Justice Department's Civil Division, their paralegal and secretarial assistants, and certain Defense Department experts, for use in preparing and conducting a possible civil suit against respondents under the False Claims Act, 31 U.S.C. § 231 et seq.⁴ Respondents opposed the disclosure, renewing their allegations of grand jury misuse. The District Court granted the requested disclosure, concluding that attorneys in the Civil Division are entitled to disclosure as a matter of right under Rule 6(e)(3)( )(i). The Court also stated that disclosure to Civil Division attorneys and their non-attorney assistants was warranted because the Government had shown particularized need for disclosure.⁵ The Court of Appeals vacated and remanded, holding that Civil Division attorneys could obtain disclosure only by showing particularized need under Rule 6(e)(3)(C)(i), and that the District Court had not applied a correct standard of particularized need. In re Grand Jury Investigation No. 78-184 (Sells, Inc.), 642 F.2d 1184 (CA9 1981).⁶ We granted certiorari, 456 U.S. 960, 102 S.Ct. 2034, 72 L.Ed.2d 483 (1982). We now affirm.

II

A.

The grand jury has always occupied a high place as an instrument of justice in our system of criminal law—so much so that it is enshrined in the Constitution. Pittsburgh Plate Glass Co. v. United States, 360 U.S. 395, 399, 79 S.Ct. 1237, 1240, 3 L.Ed.2d 1323 (1959); Costello v. United States, 350 U.S. 359, 361-362, 76 S.Ct. 406, 407-408, 100 L.Ed. 397 (1956). It serves the "dual function of determining if there is probable cause to believe that a crime has been committed and of protecting citizens against unfounded criminal prosecutions." Branzburg v. Hayes, 408 U.S. 665, 686-687, 92 S.Ct. 2646, 2659, 33 L.Ed.2d 626 (1972) (footnote omitted). It has always been extended extraordinary powers of investigation and great responsibility for directing its own efforts:

"Traditionally the grand jury has been accorded wide latitude to inquire into violations of criminal law. No judge presides to monitor its proceedings. It deliberates in secret and may determine alone the course of its inquiry. The grand jury may compel the production of evidence or the testimony of witnesses as it considers appropriate, and its operation generally is unrestrained by the technical procedural and evidentiary...