In Re Grand Jury Subpoena. United States of America v. (Under Seal)

Act, instead, implementing lieve amendment, goes beyond

the sixth intentional discrimination

hibition underrep- substantial that where

requires by virtue of exclusive exists

resentation lists, registration voter affirma-

reliance on must be taken to insure real-

tive measures require- cross section

ization of fair Jenkins, v.

ments. United States Cir.1974). (2d

F.2d this, disagree with the

Beyond I also appeal on this

court’s effort to decide underrepre- substantial

in fact there is no any group suggested by de-

sentation prop- determination is one

fendants. That by the dis-

erly made in the first instance it, court, yet

trict which has not addressed could now determine it without

and which significant dis-

undue burden and without

ruption progress of this case to its

conclusion. Judge

Judge MURNA- WINTER joining have asked to be shown as

GHAN separate opinion.

in this JURY SUBPOENA.

IN RE GRAND America, STATES

UNITED

Plaintiff-Appellee,

(UNDER SEAL), Defendants-Appellants. 87-5565.

No. Appeals, States Court

United

Fourth Circuit. 31, 1987. Argued July (Lane Edson, Eugene Propper & P.C. on 12, 1988. Decided Jan. brief); (White Case; Anne Smith & Davies Rehearing En Banc Rehearing and III; Fomaiciari; Tuohey, John R. Mark H. 18, 1988. Denied March Pierson, Dowd, Grigg; Ball Kenneth A. & D.C., brief),

Washington, for defend- ants-appellants. Sale, Slaymaker Atty. Asst.

Barbara U.S. Willcox, (Breckinridge Atty.; L. Balti- McKee, Md., more, Asst. U.S. Joyce K. brief), plaintiff-appellee. Atty., on WINTER, Judge, Before Chief Mortgage, EPIC (a Inc. subsidiary SPROUSE, EPIC), MURNAGHAN Circuit of banks, numerous and the Mary- Judges. Deposit land Corporation, Insurance the conservator for Community. appel- The WINTER, HARRISON L. Chief lants-deponents parties are not to litiga- the Judge: tion in the Eastern Virginia. District third-party deponents Four in a civil ac- In plaintiffs in the civil action in in tion the Eastern Virginia District of ap- Virginia depositions noticed the ap- of the peal judgment from a of the district court pellants. Some of deponents these became Maryland denying their quash to motion concerned complying about with this order grand jury subpoenas two by spe- issued because of ongoing grand the jury investi- cial in Maryland attorney to an gation in Maryland. The deponents moved Virginia requiring in production of their for a stay of discovery pending completion depositions sealed during taken the civil of the jury investigation in order to litigation Virginia. in The appellants-depo- being avoid forced to choose between the quash nents moved to the in subpoenas the possibility of self-incrimination and assert- Maryland district court ground on the ing their fifth rights. amendment After a depositions that the pro- were sealed hearing, Virginia the district court denied tective order issued district court in the stay. motion for With the consent of Virginia. The district court Maryland parties all deponents, and the the court quash, concluding denied motion to instead orally protective issued a protective a civil order cannot be used to sealing the deposition transcripts and limit- shield subpoena materials from ing access to transcripts parties to the grand jury. issued We affirm. in the civil action. The district court re-

quested parties that the prepare a written I. protective the district court to parties consider. The submitted the writ- special grand A jury in the district of ten order to judge the district on October Maryland is investigating the events sur- signed it was day.1 the next rounding collapse September, 1985, in The written Community Savings (Communi- depo- & sealed Loan sition transcripts which ty), was that were part group filed with the affiliated organizations court and parent limited access these corporation whose tran- scripts Equity Programs necessary court Corporation personnel, Investment (EPIC). deponents, The and the appellants-deponents the civil ac- this tion and case are their counsel. former officers The and directors or- der specifically EPIC and its stated: subsidiaries. In state of Maryland placed Community into IT IS FURTHER ORDERED that conservatorship and EPIC filed for transcript bank- or record of the deposi- sealed ruptcy. Subsequently, private several tions and the information contained mortgage companies insurance which had therein shall not be made available mortgages insured brought held EPIC state investigating agency or federal suit in the Eastern District of authority, shall not be used appellants-deponents Two of deposed were appeal appel- on this maintains following order, of the issuance oral deposed prior entry lants who were but signed. before the written order was The written order were not entitled to deposed other two were in November waiving order in following issuance of the written order. Prior fifth the oral because depositions, to their November attorneys yet tective order had not been reduced to a the two stipulations writing. obtained oral findings The district court no made from However, all counsel the civil regard. action that the this we need not reach this depositions sealed under light were terms of factual disposition issue of our February, legal question the district of whether a or- signed confirming an order stipulation may provide grounds quash oral der sealing depositions. govern- subpoena. November The any proceedings connection with apply other ed to Maryland grand jury. actions, except

than these by further or- April On the district court of der of this Court. Maryland quash. denied the motion to provided pos- order also sible modification: II. IT IS FURTHER ORDERED that appellants seek to employ a civil Order only by be modified further protective order as a defense against com this any order of other Court pliance grand jury with a subpoena de having jurisdiction the trial over manding production deposition upon tran depo- these cases notice to the scripts during obtained discovery in

nents and the to this case action to which they parties. opportunity respond. reasonable to were not The issue of comply the need to grand with the 1986, In following taking late the jury subpoena is properly before this court. depositions, these the Assistant United government The options had two seeking Attorney guiding special the grand to deposition obtain the transcripts: it investigation jury Maryland requested permissive could seek intervention in the copies deposition of the transcripts in the in Virginia pursuant action to Fed.R. Virginia litigation attorney from an for a 24(b) request Civ.P. that the defendant in that attorney pro- action. The order vacated, be modified or or it could grand vided the jury requested with the subpoena the transcripts part as of the materials, except depositions those ongoing grand jury investigation. Martin sealed the order. On Decem- dell v. Telephone International 16, 1986, grand ber the issued a sub- Telegraph Corp,, 291, (2 594 F.2d 294 Cir. poena requiring duces tecum attorney an 1979). government The validly chose the plaintiffs for the Virginia in the action to latter course in this action.2 produce deposition the transcripts of two of appellants the in this action. January On The presented issue in this case is an 21, 1987, grand the jury issued a second important impression one of first in the subpoena requiring attorney an produce concerning circuit courts legal the authori- the deposition transcripts of remaining the ty grand of the jury. Maryland The dis- appellants. Appellants subsequently filed trict court denied the quash motion to the quash. motion to subpoena ground that it lacked the authority quash the Following jury’s subpoe- hearing on the motion to na quash, duces tecum deponents, notwithstanding request at the that the of the deposition Maryland transcripts sought judge, district to be ap- scheduled ob- an pearance tained were Virginia before the sealed under the terms of a district court clarify valid civil issued anoth- During hearing, er federal district judge reaching district court. Virginia explained decision, Maryland that the district court as- was intended to bar access to sumed that the tran- relied on the scripts by Maryland grand jury and order during taking depo- were entitled to sitions and that the protective order was protect the order to validly their fifth amendment issued. The appropri- district court rights. The subsequently stip- ately legal framed the issue for considera- ulated that the tion, order was intend- agree and we with its conclusion.3 appellants 2. The appeal were government’s entitled to the dis- 3. The primary ap- contention on peal trict quash court’s denial of Virginia is that their motion to district court erred entering subpoena risking contempt without order to the fifth because the rights deponents. Mary- subpoena them, The was addressed not to but to an land district court did not consider this conten- attorney Virginia litigation. in the Perlman v. tion and we do not it. This contention address States, 7, 13, United 247 U.S. 38 S.Ct. properly should be advanced (1918). 62 L.Ed. 950 district court in the first instance because it grand jury’s question status, authori- jury is subject to the ty presented in this case involves the inter- direction of the court with respect to these section of three interests: the authority of essential functions. United States v. Unit grand jury gather evidence in a crimi- ed Court, States District (4 F.2d 713 investigation; nal deponents’ right Cir.1956), cert. nom., denied sub Valley against self-incrimination; goals and the of Bell Dairy States, Co. v. United 352 U.S. liberal dispute efficient reso- L.Ed.2d 365 As proceedings. lution begin We result, a court may not intervene in the discussing respective these interests. grand jury process compelling absent rea son. Dionisio, United States 410 U.S. 16-18,

A. 772-773, 35 L.Ed.2d 67 (1973); In Re Jury Grand Subpoenas, sweeping power April, 1978 (Harvey), 581 F.2d compel production of evidence has been (4 Cir.1978), nom., cert. denied sub Fair recognized since the founding. nation’s Industries, child v. Harvey, Inc. 440 U.S. States, Blair v. United 971, 1533, 99 S.Ct. (1979). 59 L.Ed.2d 787 39 (1919). S.Ct. 63 L.Ed. 979 Fed- grand juries eral authority derive the to B. investigate wrongdoing criminal by requir- ing testimony production and the of doc- grand The jury subpoena in this uments from the United States Constitu- case seeks discovery which, materials we tion, the Federal Rules of Criminal Proce- purposes assume for appeal, of this were dure, federal Const., statutes. U.S. produced in reliance district V; Amend. 6; Fed.R.Crim.P. 18 U.S.C. court’s blush, At first 3321 seq. et §§ resolution of might this case appear to depend on balancing deponents’ right grand jury has the authority to re- against as self-incrimination secured quire production of evidence and testi- grand order and jury’s inter mony of public witnesses because “the ... est investigation effective of crime. But right has a every to man’s evidence.” so, this is not deponents’ because fifth Branzburg 665, v. Hayes, 688, 408 U.S. 92 right against amendment self-incrimination (1972). L.Ed.2d 626 require, did on, nor may depend it grand While jury investigations subject are shield of civil orders. Deponents to limits, grand constitutional jury has were entitled to only on their own wide in gathering latitude evidence because grant silence or a immunity to power is essential to the task of crimi- rights, they otherwise waiving risked nal investigations. Thus, grand jury’s rights. those power investigate criminal offenses is “unrestrained procedural the technical with grant contrast a of immunity, the evidentiary rules governing government the con- not use a duct of criminal trials.” United compel a testify during witness Calandra, 343, 338, 613, 94 S.Ct. or proceeding. criminal civil Absent 617, 38 L.Ed.2d 561 grand grant immunity, en- were right has the titled, obtain consider all order, with without a evidence relevant to its be- deliberations assert their fifth privilege cause the nature of the crime and the iden- answer to potentially ques- incriminating tity of the accused must be ascertained tions proceeding. in a civil In Pillsbury upon based this evidence at the Conboy, 248, conclusion Co. v. 608, 459 U.S. 103 S.Ct. of the jury’s inquiry. Blair, (1983), 250 74 L.Ed.2d 430 Supreme Court 282, U.S. at 39 S.Ct. at 471. Because this principle by reversing established grand jury enjoys important contempt constitutional against entered liti- validity concerns the jur/s its civil subpoena. and does not authority concern the gant who had not received of im- amendment does not forbid adverse infer munity and who asserted his fifth amend- against parties ences to civil actions when privilege against self-incrimination in they to testify refuse in response proba deposition testimony. The Court ruled that tive evidence offered them.” Id. at party to a civil action has a right 318, 96 S.Ct. at 1558. Brennan, Justice immunity grant- until assert.the joined by Marshall, Justice dissented from ed Department officials of the of Jus- the conclusion that the fifth amendment 261, tice. Id. at 103 S.Ct. at 616. privilege did not prison extend to discipli

Deponents argue nary hearings, that the burden but agreed of si- that he would litigation lence may unduly punish “have difficulty holding such an inference an individual asserting impermissible in civil cases involving only A party’s private self-incrimination. parties.” si- Id. at 96 S.Ct. at lence, example, may bar that party (Brennan, J., dissenting).4 See Lef from asserting facts which would allow kowitz v. Cunningham, prevail him to which will have n. 2137 n. 53 L.Ed.2d 1 severe consequences financial (1977).5 for the Thus, loser. the security given to the Silence also create inferences which deponent’s in avoiding interest self-incrimi are relevant adverse to the party main- nation a civil order does not taining such silence. On the facts of this outweigh the substantial inter case, these are concerns remote because present est in this case.6 had stake in no the outcome litigation. C. Even if such present, were risk how ever, While placed burden on an signifi- do not individual’s cantly to avoid advance fifth interests, self-incrimination the in amendment they stitution of a civil do aid the private lawsuit civil courts in facilitating party implicate does not private resolution of protected values disputes. Federal by the fifth Rule of amendment. Civil Baxter v. Pal Procedure authorizes the migiano, 308, 425 1551, U.S. 96 district courts to 47 issue orders to L.Ed.2d (1976), 810 for example, encourage full Su disclosure of all relevant preme held Court fifth evidence in order to “secure just, privilege does not prison speedy, state inexpensive in determination” of mates against drawing disputes. adverse in Fed.R.Civ.P. 1. Absent ferences from the to testify during orders, failure such witnesses would be deterred disciplinary proceedings which could result from providing essential testimony punitive Court, action. The part, litigation, re thus undermining the adversary lied on the prevailing rule that “the process. fifth Martindell, 594 F.2d at many 4.In civil cases the placed burden on a 5. See also Acceptance National Co. America v. person’s may silence be Bathalter, unavoidable. Where a (7 Cir.1983) ("After 705 F.2d 929 plaintiff gathered has sufficient evidence to es- longer Baxter there is no doubt that at trial tablish prior claim discovery, a defendant a civil may defendant’s silence be used who risks speaking incrimination will inevi- him, even if that silence is an exercise of his tably face the of forsaking choice silence or privilege against constitutional tion”). self-incrimina- losing judgment, a civil even if the defendant’s silence is not used Wright him. See 8 & Miller, Federal & Practice § Procedure 2018 & 6. Fifth amendment and ethical concerns obvi- (1970). n. plaintiff 49 A requires whose claim ously raised, however, would be govern- if incriminating testimony always will likewise directly indirectly or sponsored a civil face the choice of speaking forsaking his discovery lawsuit or requests prayer in a civil lawsuit case, for redress. In either a district purpose aiding investiga- criminal reduce the party’s risk of a silence Kordel, dismissing not tion. United v. failing an cooperate action for 397 10-11, 763, 768-769, discovery, party but the will L.Ed.2d 1 nonetheless (1970). face the judgment allegation inevitable There is no trier of fact case who must make a improper decision such purpose. based an an imba- presentation lanced of the evidence. privilege against Assertion of the self-in- during jury’s criminal investiga- may disrupt crimination or thwart civil liti- tion.

gation in a variety wide privilege cases. The may slow or thwart III. ' the efficient many resolution of civil cases While no court appeals has directly privilege applies because not only to addressed the issue in this there is a information which is itself incriminating line of cases in the Circuit, Second relied on but also to information relevant to civil by parties, both which princi- discusses the liability provides which leading clue ples at first, stake here. The Martindell v. evidence of criminal conduct. Hoffman International Telephone and Telegraph States, United 71 S.Ct. Corp., supra, concerned an informal (1951) L.Ed. (privilege government request to a federal district applies response if a might provide a clue copies court for of deposition transcripts leading investigators to discover facts that which were the subject of a Rule 26 protec- could constitute in a links chain of circum- tive order. The court affirmed the district stantial evidence proving criminal miscon- court’s deny decision to the request, con- duct). Thus, may apply in cluding that the interest in protecting effi- litigation, antitrust commercial cient resolution of disputes out- and securities fraud, actions involving per- weighed the interest of the sonal injury involving actions neg- criminal effective law enforcement when such inter- ligence, or civil rights involving actions as- est expressed was “simply by picking up sault, because these civil actions elicit telephone or writing a letter to the information tending to demonstrate the ele- court.” 594 F.2d at 294. The court in ment or elements See, general- of a crime. Martindell, however, did express an ly, Heidt, Conjurer’s Circle: The Fifth opinion on how these interests should be Privilege Amendment Cases, in Civil 91 balanced when a jury subpoena Yale L.J. 1065-1071 seeks to override a valid The assertion the privilege against 594 F.2d at 296 n. 5 & 6. self-incrimination in civil can impose cases In United States v. GAP Corporation, severe litigants.7 burdens on civil Invoca- (2 Cir.1979), F.2d 10 the Second Circuit tion may occur in the answer complaint to a dealt with an attempt by federal antitrust or in response interrogatories, deposition prosecutors to obtain information covered questions, or requests for admissions. The by a protective through enforce- of assertion prior to trial of a civil investigative (CID,) demand thus significantly reduce a party’s chances issued under granted the authority to the of prevailing on the merits of his claim. Department of by Justice the Antitrust Civ- The lack of direct access to such informa- il Process Act of 15 U.S.C. 1312. § tion may prolong also litigation and The CID, court enforced the relying on the increase its costs. result, As a assertion of authority given by the statute to federal the privilege forces civil litigants to share prosecutors to seek such information. the cost of the right to of silence the indi- Corporation GAF supports enforcement asserting vidual privilege. subpoena here scope because the We must weigh therefore the grand jury power extent under the Constitu- protective which orders insure the efficient tion and federal law is at least as as broad disputes resolution of civil against the in- granted that by the federal stat- antitrust terest obtaining all relevant evidence ute.8 case, 7. example, this the district court in privilege, allowing very this com- Eastern protec- District issued a plicated piece litigation go on. tive order because of this concern: Generally, government But require making agencies after subpoe- the determination have I people testify, power these na by I E.g. which is entered limited statute. IS protective order, understanding with the (authorizing subpoenas §1312 U.S.C. docu- this satisfy mentary concerns with the fifth material or information to a "relevant considered involved a The next case Second motion intervention to modi- Davis, Circuit, United States fy protective F.2d However, proce- order. nom, denied sub (2 Cir.1983), cert. dure used to proscription avoid the of a States, Veliotis v. United protective order should not alter the sub- (1983), L.Ed.2d 1400 in balancing stantive of interests must which jury subpoena of documents grand volved a Palmieri, be conducted. In the court con- discovery during pending civil produced in cluded that the in ensuring interest effi- litigation protected by were an infor which cient disputes expressed resolution of civil understanding that the documents mal outweighed in Rule 26 the interest of law never re were confidential. enforcement, including grand jury inves- writing understanding this duced tigation, showing compelling absent a subject it the of a made need for the demanded materials. While case, In that court 702 F.2d at 422. Palmieri might distinguished be from our concluded that the interest in law enforce facilitating case because the interest in res- grand subpoena ment evidenced private disputes olution of traditionally has outweighed confidentiality in in the interest kept agreements settlement pub- from the purely expressed infor eye, principles lic in Palmieri which contrast, Id. agreement. By mal the de supported authority of a civil ponents’ confidentiality interest in the up- would still militate favor of subject case before us was made the of a holding order here in the depo written order which the grand jury's subpoena.9 face of the As a rely. nents’ were intended to result, the Palmieri decision is difficult York, in Palmieri v. New recently, Most reconcile with the Second Circuit’s earlier (2 Cir.1985), 779 F.2d 861 the court con- Corporation, decision in GAF which fa- sidered a motion vored the interests of law enforcement in in a civil action to intervene antitrust modi- analogous circumstances. fy two orders to allow the state

Attorney General and a to have IV. agree- access to a confidential settlement principles With these in mind and regarding ment and to hear evidence this light shed on them the Second Cir agreement. that, held absent a cuit, we conclude that the balance finding improvidence magistrate’s in the case must be struck in orders, favor or of ex- jury’s gather Balancing need to evidence. traordinary compelling circumstances or information, competing protected need for the interests this case fa the dis- grand jury’s trict court vors enforcement of the modify could not sub A poena. jury, subject only order to allow such to the to the access confiden- amendment, Palmieri Procedurally, tial documents. limitations of a fifth has the because Palmieri differs from our to all relevant evidence. A contrast, motion, pro- reasoning investigation"). By policy civil antitrust denied the that "the of grand jury virtually having possible activity cess issued unlimited, a can be criminal that have showing requirement without a of occurred in connection with the civil materiality relevance as a condition of en- or investigated by grand jury a far more benefits Dionisio, 1, forcement. United States v. 9-13, 410 U.S. general public encourage than the need to 764, 769-771, 35 L.Ed.2d 67 cooperative witnesses and to be more (1972). litigation." Judge Merhige civil concluded: idly by permit “This Court will not sit its 9. We mention one final case from our within processes civil and orders to be utilized as a directly circuit because it deals presented with the issue against investigation shield either a valid Judge Merhige, unpub- here. in an prosecution of those who have violated the Doe, opinion, lished United States v. Civ. No. during criminal laws of the United States (E.D.Va. 28, (Slip Op.) 79-0073-A-R March litigation. 1980), course of civil To do otherwise by group depo- considered a motion a of suggest perjury example would be to that as an quash grand jury subpoena nents to a which requested deposition transcripts could be committed under such circumstances documents and Judge Merhige impunity.” sealed under a

1475 order, significant while a impediment to a 64 (1980). L.Ed.2d 261 The Supreme Court grand jury investigation, effectively cannot upheld has the constitutionality of pro- in all problems deal instances with the visions of the federal immunity statute au- posed by litigants civil who witnesses thorizing judicial oversight grants of plead the during pretrial fifth amendment immunity only because a duty court’s un- discovery. It is not therefore a substitute der the statute is limited to ascertaining for of the privilege, invocation and it government whether the has complied with should not be afforded that status. requirements technical grant for a immunity. States, Ullmann v. A United may seriously 350 422, 434, U.S. impede investigation a 76 by grand criminal a S.Ct. 100 L.Ed. jury. 511 Kastigar given Uncoerced testimony States, v. United in a may provide important action 1653, relevant 1658, S.Ct. grand jury information investigation.10 (1972) to L.Ed.2d 212 (reaffirming Ullmann). addition, In has an interest These judicial limitations on power thus in obtaining this purposes information for counsel authorizing district courts impeachment deponents should the testi- give deponents to de grants facto fy in a materially manner inconsistent with immunity guise in the Rule 26 deposition their testimony future deponents here, orders.12 The seeking criminal Finally, protective trial. civil order on they which could may cause shielding the absurd result privilege against self-incrimi- prosecutions perjury from nation, desired such a de grant facto because, while of perjury evidence would immunity. This circuit has properly re- certainly protec- be cause for modifying allowing frained from such judicial inter- order, tive order itself im- vention into prerogatives. executive pedes investigation an might that lead to public suffers when a criminal is not believing cause for perjury has oc- prosecuted, detriment must be curred.11 weighed carefully against public ben- addition, issued efit that will accrue from the information a civil purpose court protecting which immunity compel. can The bal- deponent’s fifth if ancing of these interests has not been given paramount usurp effect would persons left to pub- to the unanswerable proper authority of the branch to executive lic. public balance the interest in confidentiality In Re Kilgo, 484 F.2d (4 1222 Cir. interest effective criminal 1973). Klauber, Accord United States v. investigation. reason, For this power 611 F.2d at 520. apply grant to a court of immunity is limited to the Another United Attorney consideration while a under 6003; order, given effect, federal law. 18 tective U.S.C. if full § Pillsbury Conboy,supra. v. impede A investigating trial function of a has no authority immunity jury, to a it is totally effective in witness on its own motion. United States furthering the civil court’s interest in facili- Klauber, v. (4 Cir.1979), 611 F.2d tating course, discovery. Of denied, cert. may encourage provide misguided govern- 10. It is quires party seeking protective contend that the order to show ability gather ment’s other evidence of crimi- good entry order); cause for Cipollone of this nal misconduct undermines this interest. The Inc., Liggett Group, (3 785 F.2d 1118—21 gather has the all relevant Cir.1986). evidence. 12.Separation powers principles also counsel Sealing discovery process pro- in civil against intervening courts in a investi- criminal ceedings also sacrifices the traditional interest gation being grand jury. conducted a Re- public obtaining access to civil T, 1030, porters v. AT & ceedings. Rhinehart, Committee F.2d 593 Seattle See Times v.Co. 20, 31, (D.C.Cir.1978). 1065 104 S.Ct. 81 L.Ed.2d (1984) (public 17 process interest in civil re- 1476

relevant evidence because the order re- successful resolution of a civil action which incriminating duces the risk that informa- deponent’s is threatened a privileged brought to the attention of tion will be law See, Heidt, generally, silence. Conjur- However, enforcement officials. an indi- Circle, supra, er’s at 1107-32. One com- may totally rely judicial pro- not vidual monly allay used alternative to fears of incriminating the use of in- tection deponent delay a is to discovery until a grant immunity. formation a 8 without pending grand jury investigation has been Miller, Wright Federal Practice & Proce- & completed. States, See v. United Shaffer (“whether court, dure at 2018 a § 920, (4 Cir.1975) 528 F.2d 922 (stating a action, protection equiva- provide civil can cases). preference stays in such Such a statute, immunity if lent to an as is needed stay, which was denied overcome, privilege is to be the claim of case, district court in salutary has the doubtful”). seems Even with a minimizing effect of the conflict between incriminating place, order in statements investigations criminal fair discovery still create the risk that to a civil litigation. addition, civil cases, In in a few action will leak sealed information or mate- pretrial hearing by a the district court into rials to enforcement relevant law authori- validity of a claim of self-incrimination ties. In the of a leak of event information may expose fanciful or authorities, frivolous assertions to law enforcement a order, privilege. Bathalter, immunity, provides unlike a 705 F.2d incriminating no trial, assurance that statements at 927. At may the trier of fact also deponent will not be used a in a deponent use the silence of a for relevant proceeding criminal or that the statements inferences Lefkowitz, that it creates. 431 will be used to obtain other relevant 5, U.S. at 808 n. 97 S.Ct. at 2137 n. 5 Moreover, order, evidence. (constitutionally protected silence be normally such as the order in this is probative considered for its value in a civil subject to modification under Rule 26 for case). Palmigiano, supra; See also Unit- sufficient cause. White, 1283, (5 ed States v. 589 F.2d 1286 addition, In order cannot Cir.1979).13 stopgap serve as more than a measure to cases, In some privilege invocation of the discovery seal Incriminating materials. in- by party may justify shifting the burden normally formation will be disclosed at trial proof in a civil action accordance with if effectively sup- even information the doctrine proof the burden of pressed prior temporary to that time. The placed party should be who is in the pretrial benefit of secrecy appeal will not position provide proof. relevant best many individuals as a for formal substitute York, See United States v. New New Ha immunity or cooperate cause them to ven Company, & Railroad 355 waiving motions Hartford 253, U.S. 256 n. n. addition, fifth privilege. amendment as (1957); L.Ed.2d shown, we previously have Commercial Molasses or- der Corp. does not York Barge Corp., an individual’s New Tank alter privilege. assert his fifth Fi- 86 L.Ed. 89 nally, to the extent that (1941). E.g., Spangard, Ybarra v. 25 Cal. investiga- shield from the risk of 486, 154 2d P.2d 687 The trial court possible perjury, questiona- tions into it is should only consider such action when invo ble whether such orders serve the interest cation of the appears to have con disputes. of fair resolution substantially tributed to party’s failure of

Apart order, proof. But, cases, from a in some a civil use of the tradi court has other available tools to ensure tional burden-shifting rules of may allow deciding deponent's judgment 13. In giving incriminating whether to admit a testimo- fact, silence as relevant evidence of a material ny result from admission of such evi- course, judge, trial has discretion to consider dence. F.R.Ev. 403. prejudice party unfair losing to a who risks litigation proceed in the face of a case-by-case approach of balancing these during discovery. silence competing interests would be appropriate, with the right part of govern- the Finally, privi- to avoid invocation of the ment to modification seek of a lege at thwarting discovery, aimed testimo- upon showing of compelling need ny waiving privilege against incrimina- under Rule 26. The find some during might tion trial be where excluded support for this contention in the Palmieri response was asserted in Supra. case. questions during discovery. E.g. SEC v. Beryllium Corp., & Oil American Only rarely could ad balancing hoc (D.C.N.Y.1969) F.Supp. (barring interests at stake here be effectively per- of documents introduction into evidence formed at the time of original entry of the party produce when failed to documents protective order. A may civil court issue a during discovery based on an assertion of order under Rule upon the privilege). Exclusion, fifth amendment like motion of party litigation. A de- order, justified would be under protect sire to commercial information or Rule 26 which authorizes a court to issue trade may request secrets motivate a for a such orders as be needed to protective order. In cases, most a court party oppression. from would be left to balance the needs of law enforcement the concerns In of summary, a district court has alterna- parties without being officials encourage parties tives available to to com- present to state their interests in the mat- ply goal discovery with the of liberal short ter. In Virginia litigation in entry of of a order. Where dis- the court did not even consult with the covery is impeded genuine nonetheless aby United attorney States entering before prosecution, fear future these alterna- and, not unexpectedly, the provide tives also tools for resolution of parties litigation all favored private disputes in the pretrial face of si- issuance of a order. It one, lence. In cases such as this where surprising, therefore, that issuance of deponents to a parties civil action are not tective orders has become suit, these devices will not burden almost routine.14 This trend cannot result exercise constitutional to si- balancing an effective of the interests lence. In other involving cases which are at stake this case. parties action, who are to an these alterna- tives parties’ burden a decision to If, however, capable courts are fairly maintain silence due to the risk of self-in- examining disparate interests of law crimination, but such burden enforcement of the civil courts in indi- context, equitable where under the circum- cases, vidual adoption of a case-by-case stances, implicate does not with values approach judicial review of which the fifth amendment is concerned. orders or denying modification protective orders will still have the effect

V. undermining both of these interests. view, balancing our adoption reasonable of The compelling of a need test respective interests of the civil courts disclosure of sealed materials investigations deprive favors en- grand federal juries of rele- jury subpoena forcement de- vant in some Despite evidence cases. spite existence of an availability protective orders, however, otherwise valid Deponents suggest, how- concerns self-incrimination ever, per favoring se rule enforce- would still option have the resisting dis- jury subpoena aof which covery requests by we asserting their fifth adopt is They suggest unwarranted. privilege. Pillsbury v. Con- Marcus, Myth Reality (1983); Doe, 14. See supra. Protective United Litigation, Order 69 Cornell L.Rev. Uncertainty boy, Supra. about the ulti- deponents the asserted their fifth amend- protective mate outcome of order a will privilege during discovery despite the may always deponent mean that no effec- protective existence the order.16 tively rely on a order to secure reasons, For these we affirm the district right against his Only self-incrimination. court’s judgment denying the motion to absolute, an unmodifiable quash. We hold that the existence of an hope provide thus the civil could courts otherwise valid order was not a tool to entice to forsake grounds sufficient quash subpoena the right to assert a fifth amendment duces tecum issued Maryland grand the privilege.15 jury- importantly, if Most even the courts AFFIRMED. position in correctly were to balance the investigations of criminal needs and the SPROUSE, Judge, Circuit dissenting: persons fifth amendment concerns of in litigation, volved the courts lack the I respectfully Judge dissent. Chief Win- authority engage constitutional in such ter for the majority has written fairly and stated, an Supra. exercise. As we have comprehensively of conflicting public the balancing the of the interests of en law underlying interests ap- issues in this properly forcement other needs is peal. disagree, however, I majori- with the It, department. alone, the executive ty’s resolution of the conflict. has the to determine whether to im munize a witness. United v. Klau I ber, supra; Kilgo, supra. In Re my view, principal issue is the It per- should be noted also that a rule same presented as that in Palmieri v. mitting protective prevail order to over a York, State New where the Second Cir- grand jury subpoena in some instances cuit observed that case lies at the “[t]his easily could become a tool delaying juncture of competing imperatives two investigations. criminal Parties who are judicial our system: the need of a ... subject jury investigation gather evidence ongoing and are litigation who involved investigations, criminal would, and the need of course, our often seek or- district litigants courts and civil ders in such instances. facili- government tate efficient resolution disputes undoubtedly would choose to ...” intervene in (2d Cir.1985). F.2d civil actions to obtain this relevant evi- Palmieri upheld protective government Even if govern- dence. ultimately prevailed, because, ment attack among reasons, additional other delay grand jury investigation, litigants pos- justice our system must be sibly purpose, for no unsealing because able to on assurances of confidentiality protected might only given materials reveal that judges.1 trial The Second Cir- Note, Using Equitable Powers to Coordinate indicated that the in that case had Actions, Parallel Civil and Criminal 98 Harv.L. privilege during invoked though they depositions al- (1985) ("Uncertainty Rev. 1037-38 about vigorously litigated authority great likelihood of modification can be be- government order to bar access unpredictable balancing cause courts use an deposition Note, test transcripts. Nonparty orders_ modify to decide Materials, whether to With- Discovery Access to supra, at 1104. immunity, out formal an accused would be re- luctant, foolish, perhaps potentially 1. The self-incriminating deposition to dis- submit Note, covery"); testimony Nonparty Discovery Access to stronger at issue here makes this a Courts, denying government Materials in the Federal case for 94 Harv.L.Rev. access than (1981) ("The argument presented case, depo- Palmieri. In that deposi- nent will not subpoena invoke his if issued a ad testificandum governed 26(c) tion sought is a rule protec- a modification of the surely fallacious”). require tive order to testify Palmieri to concern- ing protected agreement settlement and to example, 16. For litiga- at the gain conclusion of the negotiations access to- the settlement tion in the supra, Martindell the record terms. longstanding emphasis impor- cuit’s The majority eschews balancing discrete upholding protec- competing tance to civil interests and per creates a se my overriding rule orders reflects views. Rule tive opposed by grand when jury subpoenas. It function of a vital or- [T]he reaches this result balancing abstract 26(c), der under Rule issued F.R.Civ.P. concepts rather than the facts of each case. just, is ‘to secure the ... speedy process In the I feel it has swept away a inexpensive determination’ of civil dis- long-standing tool for management the putes, F.R.Civ.P., by encouraging Rule litigation. Litigants relying on protec- might full of all disclosure evidence that tive orders significant offer a amount of conceivably be objective relevant. This cases, evidence in civil ruling but our today represents the cornerstone of admin- our squelch will the desire of future deponents justice. of civil istration a valid Unless give to evidence under a order. 26(c) protective Rule fully order is to be longer No deponents will be able to on enforceable, fairly relying witnesses power the of a United States District Court upon such will be from inhibited to limit disclosure of their testimony to giving testimony litiga- essential in civil parties. government third The will become tion, undermining procedural thus sys- player a new in the civil discovery process, successfully developed tem that has been forcing deponents to invoke the fifth years disposition over the of civil amendment retarding and thus effective differences. discovery. informative II [Ajbsent showing improvidence in agreeing generally While with what the grant 26(c)protective the of a Rule majority concerning written has the invoca- or extraordinary some circumstance or tion of the privilege, fifth amendment I compelling need ... a witness should be nevertheless feel that the outcome it reach- rely upon entitled to enforceability the permits es government an end run the par- third deponents’ around these privileges against ties, including Government, the and ... deponents self-incrimination. The pos- such an order should not be or vacated sessed help information that would resolve merely modified the accommodate disclosing but refrained from inspect protected Government’s desire to apprehension it because of their it that testimony possible use in a criminal grand would be jury. transmitted to the investigation.... They only on testified reliance the dis- Martindell v. Telephone International & pledge trict poten- court’s their 291, 295, (2d Telegraph, 594 F.2d 296 Cir. tially self-incriminating remarks from the 1979); Palmieri, see also 779 F.2d at 864- grand jury. (and therein). cases cited grand jury investigato- The has awesome deponents The here would not have and, ry powers majority correctly as the deposition vided testimony the but for their notes, operates principal it reliance on the district court’s statement public everyman’s has evidence. testimony beyond would be Branzburg Hayes, 408 government’s In balancing reach. 33 L.Ed.2d 626 grand jury interest the interest in counterbalancing Rather than use supporting the integrity judicial guar- of a suggested orders as ma- purposes promoted antee and the by Rule however, jority, great pow- reservoir of 26,1 am persuaded grand jury that the reposed grand er jury represents an compelling interest here establishes a need enforcing additional or- reason for such breach the ders.2 observed, 2. As the Seventh Circuit has supplemental powers, "the ex- tion of absent unusual plicit grant investigative pow- of such extensive circumstances.” Wilk v. American As Medical sociation, preclude (7th 1980); ers implica- be construed to should F.2d Cir. Here, calling deponents investigation grand jury” without both over- grand appear, jury 26(c) will obtain evidence states the reach of the Rule shield and contemplation protec- given express understates power retained body. government jury. provides tion from that re- Rule only limit- protection that, here, it would not have ceives evidence obtained ed for evidence overriding but for order that not exist but for the order itself. spawned deposition question. immunity, Unlike a agreeing to the or- order has no on effect the continued con- rights in grand jury’s der waived fifth amendment re- duct of the investigation. The court, liance on the order of a district depo- remains free to call the possibility now face the of criminal action explore nents before the prosecute based evidence otherwise fifth amendment claims and grant immunity. could not have obtained without their hav- If are im- ing munized, immunized. been can then demand sought-after evidence and the balance view, majority In the the enforcement of conclusively would tilt enforcing towards grand jury subpoena previous for deposition testimo- subpoena for evidence would constitute a ny. judicial grant immunity. agree I granting immunity prosecution from in ex- Another reason that change testimony pre- is the exclusive fall short of a of immunity is that rogative they of the executive branch.3 Protec- can be modified. Perjury committed orders, however, tive judicial by deponents 26(c) are limited protection, under Rule productive quick devices to foster and dis- for example, obviously justify modi- covery. Testimony given 26(c) fying under Rule permit order to en- apart is isolated and from a subpoena criminal inves- forcement of a depositions tigation deponent’s given and does not alter the potential under it. The for modifica- potential culpability. Rule 26 does not tion of a overriding order or it usurp powers grand jury prose- of the through subpoena thus belies fears of cutor, authority harming grand but instead reflects the jury investigations. Here, judge manage discovery a trial Judge and con- Hilton expressly provided that his judicial trol access to See Seattle records. subject order was to modification. Rhinehart, Times Co. v. 81 L.Ed.2d Ill majority’s argument protec-

The majority argues that a The that Rule “may seriously impede tive order supplanted a criminal ineffective and should be Hayden see also H.L. Co. v. Siemens process Medical will now invoke the less intrusive Systems, aff'd, (S.D.N.Y.1985), 106 F.R.D. seeking modification of a order from (2d Cir.1986). 797 F.2d 85 issuing judge when he knows he has virtual- ly authority judge’s unreviewable to override the majority 3. The is concerned that enforcement of simply by shielding himself in the cloak preclude grand jury's order to grand jury’s investigative “broad func- protected access to the materials would consti- only subpoena pit tion?” Not does the the exec- unseemly "judicial tute intervention into execu- result, judicial, may utive but it as it prerogatives.” contrary, tive To the there is no judicial did in this in conflict within the processes interference with executive when a enforcement, prosecutor branch. For must judge prior enters a appear judge before one district and ask him to grand jury may indication that a desire re- Here, issuing judge's Judge override the Likewise, protected view the materials. the uni- Hargrove effectively "reversed” the decision of verse of information to which the fifth amend- contrast, Judge seeking Hilton. modification potentially ment be, could attach not issuing judge be, appealing, from the if neces- subject never of a decision, sary, an investigation. adverse would conform with majority’s separation pow- moreover, logic, appellate practice, encourages prosecutorial ers common trial and and avoids judicial subpoena procedure. by validating intrusion into the the friction inherent in the domain subpoena per Corp., the use of a duces tecum as a se See United States v. GAF (2d 596 F.2d Cir.1979). prosecutor enforceable device. What other methods of eliciting evidence from

recalcitrant I disagree. witnesses. Huey Henry BREAUX, H.H. d/b/a vitality order has made it Breaux, Enterprises, a valuable method of facilitating discovery. Plaintiff-Appellee, Placing higher proof burdens of upon those who invoke the fifth amendment in SCHLUMBERGER OFFSHORE SER- could well retard the truth- VICES, A division Schlumberger seeking function of discovery, it Ltd., Defendant-Appellant. penalizes unnecessarily the exercise of a No. 86-4441. right. constitutional Nor stays are of dis covery during jury investigation United States Court of Appeals, inquiries into the validity of fifth Fifth Circuit. adequate claims substitutes for Jan. 26(c) protective Rule orders. While these are both useful management trial tech Michael Hantel, P. Orleans, New La., niques, they can replace longstand Ramon Marks, P. New York City, for de- ing played role 26(c). view, Rule In my fendant-appellant. Judge Hilton was well within appropriate John G. Swift, Davidson, Meaux, Sonnier discretion in rejecting deponents’ mo & Roy, Lafayette, La., for plaintiff-appel- tion for a stay because of the pressing need lee. depositions question. D’Ip

polito v. Co., American Oil 272 F.Supp.

310, 312 (S.D.N.Y.1967). I also disagree possible leaks of confidences covered

by protective order and potential

disclosure of information at trial warrant OPINION-ORDER ON REMAND FROM per se rule announced the majority. THE SUPREME COURT OF Those form factors valid tactical concerns LOUISIANA for parties considering protective orders GARZA, Before WILLIAMS, and during discovery, but the very purpose of GARWOOD, Judges. Circuit 26(c) Rule is to foster wide-ranging, suc cessful discovery will often forestall a GARZA, Judge. Circuit public trial. football, Like a punted case has been sum, I feel that Rule has worked from court to court for some time. A long and quietly to effect the efficient and federal court, district supreme state just management of civil discovery. court, and two panels court, of this have emasculation of to- reviewed the same issue as it has bounced day’s replaces decision the rule with through a new the various courtrooms. This liti- presence in roving eye gation began Breaux, when —the a commercial of government and the attendant owner, rush property brought suit affected litigants to invoke the fifth Schlumberger, prospective lessee, amendment in discovery. specific performance and damages on an

oral lease. The district court ruled that Nicholls, T.C. a construction coordinator at Schlumberger, apparent had authority bind Schlumberger to the agreement lease with Breaux. appeal, On panel of this court judgment, reversed the but remanded case determination whether a detrimental reliance recovery basis of was possible. remand, On the district held that reasonably Breaux relied his

Case Details

Case Name: In Re Grand Jury Subpoena. United States of America v. (Under Seal)

Court Name: Court of Appeals for the Fourth Circuit

Date Published: Mar 18, 1988

Citation: 836 F.2d 1468

Docket Number: 87-5565

Court Abbreviation: 4th Cir.