In rе SUBPOENAS TO LOCAL 478, INTERNATIONAL UNION OF OPERATING ENGINEERS AND BENEFIT FUNDS, Appellants.
No. 599, Docket 82-6163.
United States Court of Appeals, Second Circuit.
Argued Dec. 13, 1982. Decided May 19, 1983.
708 F.2d 65
I would therefore find that appellants are likely to succeed on the merits in their challenge to HUD‘s rulemaking procedure. There remains a question whether they have shown irreparable harm. Although the district court did not make a final ruling on Williams’ claim of irreparable harm, it commented as follows on that issue:
“Although purely monetary harm does not usually provide a basis for equitable relief, it can have serious and irreparable corollary effects when low incоme persons are the injured parties. The threatened rent increase in this case could force plaintiff and others ... to either forgo basic necessities in order to make higher rental payments, on the one hand, or face eviction because of their inability to pay higher rent, on the other hand. In either case, the harm suffered by low-income tenants would be irreparable.” Opinion of 10/22/82 at 20.
I agree. HUD responds that if NYCHA adheres to its present plan for adjusting tenant rents, Williams’ rent may not be adjusted until February 1984. They therefore contend that any harm to Williams is speculative.
I disagree. The NYCHA is legally empowered to raise Williams’ rent on 30 days notice; moreover, HUD is exerting pressure on NYCHA to put the rent increase into effect immediately, and NYCHA risks sanctions for fаiling to do so. Although Williams may be spared for several months if he is fortunate, I agree with the observation of this Court in Carey v. Klutznick, 637 F.2d 834, 837 (2d Cir.1980), that “although the irreparable injury that [appellants] seek to assert [is] a ‘possibility,’ every irreparable injury is merely a possibility until it is actual and can no longer be averted.” Under these circumstances, I am sympathetic to Williams’ argument that the government should not be permitted, in litigation with poor and powerless citizens such as Williams, to evade review of its actions by arguments that any time a citizen may try to seek relief is the wrong time. Williams Reply Br. at 17.
For these reasons I would reverse the judgment of the district court and direct it to enjoin the implementation of HUD‘s rent increase rules.
J. Daniel Sagarin, Hurwitz & Sagarin, P.C., Milford, Conn. (William B. Barnes, Milford, Conn., of counsel), for appellant Local 478, IUOE.
Bernаrd J. Panetta, II, Sp. Strike Force Atty., U.S. Dept. of Justice, Washington, D.C. (Alan H. Nevas, U.S. Atty., D. Conn., New Haven, Conn.), for appellee U.S.
Before OAKES, VAN GRAAFEILAND and MESKILL, Circuit Judges.
This is an appeal from denial of motions brought by a union challenging a Special Grand Jury investigation of it and its benefit funds. The Union alleges governmental harassment through the issuance and administration of multiple subpoenas. The Union sought to terminate the investigation, to quash subpoenas ad testificandum issued to sixteen clerical employees, and to order an inventory and return of original documents retained by the Special Grand Jury. The United States District Court for the District of Connecticut, Ellen Bree Burns, Judge, held that while the Union did have standing, it had failed to sustain its burden of overcoming the presumption of regularity attaching to grand jury proceedings. She found no reason to takе the “unprecedented and extraordinary” action of terminating the grand jury proceedings even if the court had supervisory powers to do so. The court further held that it would decline to quash the subpoenas ad testificandum because there was a lack of showing that the investigation was undertaken in bad faith, that the subpoenas were intended to harass the Union, or that the information sought was wholly irrelevant to the investigation. She accepted the Union‘s inventory of documents in the Grand Jury‘s possession, but declined to order their return because the Government substantiated the Grand Jury‘s need to retain them. The Union appealed Judge Burns‘s order on each of its motions. We find that denial of the Union‘s motion for return of documents is appealable as a final order, and we affirm as to it. The district court‘s denial of the remaining motions to terminate the investigation and to quash subpoenas ad testificandum issued to clerical employees, however, does not constitute an appealable order. Because the Union has not alleged facts bringing it within the narrow group of exceptions to the final order rule, we dismiss the appeal from that denial.
1. The Investigation
Successive federal grand juries in Connecticut have been investigating possible
Counsel for the Union describes thirty-five subpoenas issued over a two year period to the Union and its Welfare Fund, Pension Fund, Officers and Employees Pension Fund, Apprenticeship Skills Training Fund, and Supplemental Unemployment Benefit Fund, all located at the Union headquarters in Hamden, Connecticut. Nineteen subpoenas were issued to officers and custodians of records to produce cash receipt and disbursement journals, cancelled checks, and the like. The Union describes these subpoenas as abusive because they were overbroad, duplicative, and administratively burdensome. It complains, for example, that the Government demanded production of 120,000 checks in nine days without specifying month, year, and account, and unnecessarily retained original ledgers and business-keeping records without even providing the Union with receipts. When custodians claimed a privilege not to authenticate certain records, the Government served subpoenas on sixteen clerical personnel. Service on a Friday required appearance to testify the following Wednesday, and, the Union asserts, “frightened the clerical personnel. All work stopped.” Cumulatively, “the Government‘s abuse of Grand Jury prоcess impaired the function of the Local and the Funds by taking people away from work, scattering important documents, and destroying morale.” Union Brief at 17.
The Government, on the other hand, describes a good faith investigation of possible federal law violations—embezzlement from union funds,
2. Appeal of Orders Relating to Ongoing Grand Jury Investigations
A properly taken appeal gives this court a power to review, not a power to intervene. Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546 (1949). Our jurisdiction under
But the underlying purposes оf the finality rule in some cases require deviation from appellate review limited to the contempt scenario. United States v. Nixon, 418 U.S. at 691. Thus, the Supreme Court has given a practical rather than a technical construction to the final order rule. Cohen v. Beneficial Industrial Loan Corp., 337 U.S. at 546. Justice Frankfurter, writing for the Court in Cobbledick, supra, while stressing the historic character of finality as a condition of review,1 acknowledged that it would be inappropriate to apply the rule “when observance of it would practically defeat the right to any review at all” of a constitutional claim. 309 U.S. at 324-25, 328-292. Thus, when a person has been subpoenaed to produce documents that are the property of a third party who claims that the material is immune from production, the third party has been permitted to appeal because it is unlikely that the witness would risk a contеmpt citation in order to create an opportunity for review of the third party‘s claim of privilege. Perlman v. United States, 247 U.S. 7, 12-13 (1918) (documents implicating privilege against self-incrimination). Accord, In re Katz, 623 F.2d 122, 124 (2d Cir.1980) (privilege against self-incrimination); In re Grand Jury Proceedings (FMC Corp.), 604 F.2d 798, 801 (3d Cir.1979) (attorney-client privilege); In re Horowitz, 482 F.2d 72, 82 (2d Cir.) (privilege against self-incrimination), cert. denied, 414 U.S. 867 (1973).
Analogously, in order to protect a testimonial privilege, a third party may also in some circumstances seek review of a subpoena directing another person to appear and testify. Gravel v. United States, 408 U.S. 606, 608 n. 1 (1972) (Senator asserting Speech and Debate Clause privilege moved to quash subpoena directing aide‘s testimony, and then for appellate review). A final relevant category of appealable interlocutory orders involves motions for return of seized property where there is no pending criminal prosecution. DiBella v. United States, 369 U.S. 121, 131-32 (1962)3.
3. The Motion to Terminate
Analyzing the orders presented to us for review within this framework, we have no difficulty concluding that the order denying the Union‘s motion to terminate the Special Grand Jury investigation is not a final order and hence is not appealable. The Union may obtain appellate review of its claim of harassment by refusing to cooperate with the continuing investigation, thus placing itself in contempt.
Because courts have allowed immediate government appeal from orders effectively terminating grand jury investigations, the Union argues that the order denying its motion to terminate should similarly be appealable. In In re Grand Jury Proceedings (U.S. Steel-Clairton Works), 525 F.2d 151, 155, 156 n. 20 (3d Cir.1975), for example, permitted an appeal from a district court order staying indefinitely a grand jury proceeding. The court reasoned that an indefinite stay had the practical effect of dismissal, precluding investigation of possible criminal violations of the Clean Air Act. The order was “final” and reviewable because the government could not, by resistance, submit to adjudication of contempt to obtain appellate review. The Union in this cаse is, in effect, asking for symmetry, but the Third Circuit‘s reasoning demonstrates why symmetry is irrelevant. Here, the Union can seek review by standing in contempt; when this mechanism is available, the Supreme Court‘s balancing test tells us that it is a sufficient procedure for appeal. Cobbledick, 309 U.S. at 327.
While the duty to appear before a grand jury may burden, embarrass, or injure social and economic status, United States v. Calandra, 414 U.S. 338, 345 (1974), the individual interest will usually yield to society‘s interest in a thorough and extensive investigation. Branzburg v. Hayes, 408 U.S. 665, 701-02 (1972)5. In the federal
Congressional action provides further support for not permitting appeal of this interlocutory order denying the motion to terminate. The inquiry giving rise to the cоmplaints before us is being undertaken by a Special Grand Jury, a body created under the Organized Crime Control Act, Pub.L. No. 91-452, § 101, 84 Stat. 922, 923 (1970) (codified at
As the Supreme Court has reminded us, “the finality requirement embodied in
4. The Motion to Quash
The issue presented by the Union‘s appeal of Judge Burns‘s denial of the motion to quash subpoenas ad testificandum addressed to sixteen clerical employees has somewhat different dimensions.8 We hold
It is true that the Union does not have the option of refusing to comply with the subpoenas, which are not addressed to the Union or its officers, and seeking review of the merits of its claim in a contempt proceeding. It is also true that the clerical employees to whom the subpoenas are addressed are not likely to risk contempt in order to provide their employer with an opportunity for review. The Union would have us inquire no further, urging us to read the third party standing cases as mandating an exception to the final order requirement whenever an affected party cannot seek review of its claim through a contempt proceeding. Our review of the Supreme Court‘s discussion of this issue in the grand jury context, however, does not permit us to draw the exception to the rule with such a broad brushstroke. The principled balance struck by the Cobbledick Court acknowledges the standing of a third party to seek immediate review when the technical observance of thе final order rule would defeat the right to any review at all of a constitutional claim. 309 U.S. at 324-25, 328-29. Standing to pursue an interlocutory appeal has been granted when the third party claimed a constitutional privilege in documents in the hands of a subpoenaed witness, Perlman v. United States, 247 U.S. 7 (1918) (privilege against self-incrimination), or testimony, Gravel v. United States, 408 U.S. 606 (1972) (privilege under Speech and Debate Clause). The third party also has standing to appeal from an interlocutory order that would effectively negate a valid statutory or common law privilege. In re Grand Jury Proceedings (FMC Corp.), 604 F.2d at 801 (attorney-client privilege); see also Blair v. United States, 250 U.S. at 281 (“some confidential matters are shielded from considerations of policy“). These cases require us to grant third party standing to pursue an immediate appeal when we find two conditions. First, the order appealed from must be effectively unreviewable absent an immediate appeal. Second, the order must affect fundamental rights whose legal and practical value will be destroyed if not vindicated on collateral review.
[11] Here, the Union does not assert a constitutional, statutory, or common law privilege. Clearly, the subpoenas demand only testimony, not the production of documents.9 There is no issue of self-incrimination, attorney-client privilege, or the like. The Union‘s claim is that it has suffered harassment sufficient to constitute abuse of Grand Jury process. Standing to pursue this claim on appeal is predicated on a property interest in employees’ time and attention and on irremediable disruption of its business. To stretch the Court‘s holdings on the third party exception to encompass this amorphous assertion of standing to appeal an intеrlocutory order would swallow the rule and disrupt the balance struck by the Court to preserve both fundamental rights and effective grand jury investigations.
The Union relies on In re Matter of Grand Jury Applicants (C. Schmidt & Sons, Inc.), 619 F.2d 1022 (3d Cir.1980), to establish its standing to appeal the order. While it is true that the Third Circuit granted standing to appeal in part because the employer had a contractual property interest in employee services, and was being deprived of employee time and effort by subpoenas directing employees to testify, the court additionally based its standing deter
We believe that the Third Circuit‘s opinion should be limited to its facts. Insofar as C. Schmidt & Sons, Inc. may suggest third party standing to appeal denial of a motion to quash subpoenas to testify directed to employees on the basis that the third party employer has a property right to prevent disruption of its business affairs, the opinion seems to us to be in error. Such a grant of standing lacks a limiting principle that would be consistent with the balance struck by the Supreme Court in charting exceptions to the final order principle. It is clear that a witness may not justify exemption from the finality requirement by merely asserting that compliance with a grand jury subpoena will create a substantial burden unless immediate appellate review is available. United States v. Ryan, 402 U.S. at 532. If a third party employer could seek review on a showing of disruption of employees’ time and attention, or a substantial burden to its business interests, any employer could impede a grand jury investigation, whether or not the employer came forward with concrеte assertions that the legal and practical value of fundamental rights would be destroyed if collateral review were withheld.10 Firestone Tire & Rubber Co. v. Risjord, 449 U.S. at 376-77. The cases teach that such a showing must be made before a third party has standing to appeal denial of its motion to quash subpoenas directing other witnesses to testify.
5. The Motion to Return Documents
The Union sought an inventory of all materials in the hands of the Special Grand Jury and the return of documents, particularly cash receipt and disbursement journals for 1973-1979, given to the Grand Jury in October of 1981, and other original records. But the Union here knew precisely what documents had been subpoenaed, and for what investigatory purpose, and therefore did not need disclosure to substantiate its allegations of harassment and abuse of process. Compare In re Grand Jury Proceedings (Schofield), 486 F.2d 85, 93 (3d Cir.1973). The court quite sensibly adopted the Union‘s inventory as true. Judge Burns did not, however, require return of the original journals because the Government substantiated the Grand Jury‘s continuing need for the original documents.
Orders denying a motion to return documents are final, appealable orders when the motion “is in no way tied to a criminal prosecution in esse against the movant.” DiBella v. United States, 369 U.S. 121, 132 (1962). The appeal is properly before us. Reviewing this issue, however, we find no reason to disturb the district court‘s exercise of discretion. The Special Grand Jury, investigating record-keeping viola
For the reasons stated above, the order denying the Union‘s motion to terminate the Special Grand Jury investigation is not a final order under
MESKILL, Circuit Judge, concurring in part and dissenting in pаrt:
I concur with the majority‘s decision to affirm on the merits the order denying the request of Local 478, International Union of Operating Engineers (Union), for an inventory and return of documents presently held by the Special Grand Jury. I dissent, however, from the majority‘s decision insofar as it dismisses the Union‘s appeal from the order denying its motion to terminate the grand jury investigation and to quash the subpoenas ad testificandum.
Since early 1980, successive federal grand juries have been investigating possible embezzlement,
The Union in its Motion to Quash and for Other Relief asserted a due process right to protection from harassment. Also, the Union claimed a property interest in the time and services of its employees. In its motion and supporting memorandum of law, the Union alleged that the government was using the Special Grand Jury as an instrument of harassment. It claimed that the many waves of subpoenas were burdensome and repetitive and that the government had gone out of its way to make compliance difficult. As a result, the investigation has allegedly cost the Union heavily in employee time, copying costs, disruption of records and accountant and attorneys’ fees. The Union characterized the sixteen subpoenas ad testificandum as a concrete manifestation of grand jury abuse thаt would distract its employees and disrupt its operations. The Union asked that the district court quash the subpoenas and terminate the investigation. Although the motion papers and the majority treat the motion to terminate and the motion to quash separately, each motion is grounded upon the same allegations; they differ only as to the relief sought.
Judge Burns denied the requested relief on the merits. She found “no merit to the claim that the government has abused the investigatory powers vested in the grand
The majority holds that the denial of the Union‘s motion to terminate the grand jury investigation is a nonappealable interlocutory order. With respect to the Union‘s motion to quash, the majority concludes that the Union is without standing to appeal. I do not agree with either of these positions. I believe the issues of standing and appealability are distinct and should be so treated.
Standing
One basis for the majority‘s decision to dismiss the Union‘s appeal is that the Union‘s assertion of injury premised on its property interest in the time and attention of its employees is too “amorphous” to confer standing to appeal. Standing has a constitutional and a prudential component. The constitutional aspect of standing requires simply “injury in fact.” Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 472 (1982). Among the рrudential considerations that bear on standing is the requirement that the “plaintiff‘s complaint fall within ‘the zone of interests to be protected or regulated by the statutory or constitutional guarantee in question.‘” Id. at 475, quoting Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 153 (1970). I believe that the Union satisfies both of these standing requirements. As to the requirement of injury in fact, the Union alleges that the repeated waves of subpoenas have disrupted its operations and have caused it to incur great cost. In addition, it alleges that the subpoenas ad testificandum addressed to its employees will deprive the Union of their time and attention. The injury alleged by the Union is not de minimis; it is concrete and particularized.
Although the Due Process Clause does not insulate an employer from the legitimate scope of a grand jury investigation, see In re Grand Jury Proceedings (FMC I), 604 F.2d 798, 804, 805 (3d Cir.1979) (“employer does not have the authority to prohibit an employee from complying with a subpoena“); In re Grand Jury Investigation, 459 F.Supp. 1335, 1340 (E.D.Pa.1978) (appearance before grand jury is “a public duty owed by all citizens to the government“); In re Morgan, 377 F.Supp. 281, 285 (S.D.N.Y.1974) (“For the public good, the scales must tip in favor of the duty of the Special Grand Jury ‘to inquire into offenses against the criminal laws of the United States’
If this were a case where an employer had moved to quash a subpoena ad testificandum issued incidentally to one of its employees, I would question its standing to do so. Although an employer does possess a property interest in the time and attention of its еmployees, society‘s interest in effec
Appealability
I have no quarrel with the majority‘s insistence on finality as a prerequisite to appealability. The policy of finality embodied in
As explained earlier, the Constitution protects against grand jury abuse and deprivations of property without due process. The Union has alleged that both protections are threatened by the grand jury investigation, now over two years old, that produced the subpoenas ad testificandum at issue here. These same allegations were deemed sufficient by the district court to allow intervention and are sufficient to confer standing. Although the subpoenas were addressed to employees of the Union, the majority inexplicably concludes that “the Union can seek review by standing in con
I wholeheartedly agree with the majority that the mere assertion “that a ruling is or may be effectively unreviewable absent immediate appeal is not a sufficiently concrete assertion of fundamental rights the legal and practical value of which will be destroyed if not vindicated on collateral review.” But the Union‘s allegations go beyond mere assertions and are, in my judgment, sufficient to warrant appellate review. The majority is concerned that by allowing appeals in situations like that before us, we open the gate to a flood of challenges to legitimate grand jury investigations. I do not envision this scenario. Standing is a formidable barrier to third party intervention and stiff measures are available to penalize those who abuse the judicial process. United States v. Potamkin Cadillac Corp., 689 F.2d 379, 381-82 (2d Cir.1982) (per curiam);
While the historical powers of the grand jury are broad, since the panel operates in secrecy and to a great extent under the guidance of the prosecutor, opportunities for abuse of the subpoena power are ever present. The grand jury, an integral component of the judicial branch of government, has the power of compulsory process, a power the Congress has not chosen to grant to the investigative offices of the executive branch. The courts must be vigilant against abuse of the grand jury power, for any such abuse would tend to erode the division between the separate and independent branches of the federal government.
In re Wood, 430 F.Supp. 41, 47 (S.D.N.Y.1977).
I am convinced that the Union has standing and that it has alleged a threat to its fundamental rights which, if not remedied now, might result in irreparable harm. I would affirm the judgment of the district court on the merits in its entirety for the reasons spelled out in Judge Burns’ memorandum of decision.