United States v. Under Seal
646 F.3d 159
4th Cir.2011Background
- Under seal appellant Company1 appeals district court denial of its motion to quash government grand-jury subpoenas served on intervenor Company2; subpoenas seek documents Company1 produced to Company2 during Civil Litigation in EDVA; Company2 intervened in support of government.
- Investigation began in 2007 into a former Company2 employee who provided services to Company1; employee pled guilty in 2009 to theft of trade secrets and obstruction; Civil Litigation between Company1 and Company2 filed in 2009.
- Protective Order in summer 2009 limited use of Confidential materials and set notice/objection procedures for subpoenas; documents designated Confidential—Attorneys’ Eyes Only could be disclosed only to outside counsel.
- Two subpoenas were issued: Aug 14, 2009 and May 21, 2010; Company2 produced ~4,200 pages on Aug 26, 2009; later disputes centered on Confidential materials and preservation under the Protective Order.
- District court on July 26, 2010 held government interactions with Company2 not improper, held subpoenas trumped the Protective Order, and denied Company1’s motions; Company1 timely appealed seeking return/destroy or barred use of documents.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MLAT or Rule 17 limits apply to foreign-party discovery | Company1 argues MLAT exclusivity; Rule 17(e)(2) prevents serving in foreign country | Government contends MLAT not exclusive; documents located in US via civil discovery are permissible | MLAT not exclusive; subpoenas allowed |
| Whether civil discovery was used to subvert criminal discovery | Company1 asserts improper collusion to obtain documents | Govt and Company2 acted independently; no improper collusion established | No improper subversion; subpoenas valid under Rule 17 |
| Whether an evidentiary hearing was required | Company1 seeks evidentiary hearing to probe collusion | District court findings sufficient; no need for hearing | No further evidentiary hearing warranted |
| Whether the Protective Order trumped by subpoenas | Protective Order should bar disclosure | Subpoenas enforceable; there is a per se rule favoring enforcement against protective orders | Protective Order does not trump subpoenas |
| Whether DOJ internal guidelines created enforceable rights | Guidelines violated by requiring pre-approval for disclosures | Guidelines are internal and not enforceable rights; do not bar subpoenas | Guidelines do not create enforceable rights; no violation |
Key Cases Cited
- Branzburg v. Hayes, 408 U.S. 665 (U.S. Supreme Court 1972) (grand jury subpoena rights and limits of subpoena power)
- In re Grand Jury Subpoena, John Doe No. G.J.2005-2, 478 F.3d 581 (4th Cir. 2007) (subpoena reasonableness standards in the Fourth Circuit)
- In re Grand Jury Subpoena, 836 F.2d 1468, 836 F.2d 1468 (4th Cir. 1988) (civil depositions may inform grand jury investigations)
- United States v. R. Enterprises, Inc., 498 U.S. 292 (U.S. 1991) (scope of grand jury investigative powers; reasonableness of subpoenas)
- Moussaoui v. United States, 382 F.3d 453 (4th Cir. 2004) (limitations on service of subpoenas on foreign nationals)
- Rommy v. United States, 506 F.3d 108 (2d Cir. 2007) (MLAT and evidence obtained outside MLAT process guidance)
- McSurely v. McClellan, 426 F.2d 664 (D.C. Cir. 1970) (civil discovery cannot be used to subvert criminal discovery)
- Parrott v. United States, 248 F.Supp. 196 (D.D.C. 1965) (parallel civil proceedings cannot aid criminal prosecutions)
- In re Grand Jury Subpoenas, 627 F.3d 1143, 627 F.3d 1143 (9th Cir. 2010) (documents moved from outside to within grand jury reach; government may close its grip)
- United States v. Cooks, 589 F.3d 173 (5th Cir. 2009) (internal DOJ guidelines not enforceable rights)