The purpose of our Constitution is to create a government that protects people from each other. The purpose of our Bill of Rights is to protect each of us from our government. Fundamental in any ordered system of government is an understanding that the people have the right to be free from crime. But, even more important, the people have a right to be free from a government that takes life, liberty, and property without due process of law.
This Article focuses on whether the development, interpretation, and administration of federal grand jury secrecy provisions has adhered to due process strictures. It suggests that due process concerns have yielded to goals of government efficiency in federal law enforcement. The Article offers a solution that protects historical grand jury secrecy while encompassing the concerns of efficient and effective federal law enforcement. This easily executed solution has eluded the U.S. Supreme Court, Congress, and commentators over the last fifty years. Only one U.S. Court of Appeals decision, Maryland & Virginia Milk Producers Ass'n v. United States, has recognized the simplicity and fairness of this solution to both the people and the government. The Supreme Court, however, has never even discussed this critical 1957 D.C. Circuit decision, propounded by the Secretary to the 1946 Advisory Committee on the Federal Rules of Criminal Procedure, in its later, seminal decisions on grand jury secrecy. This simple, unnoticed, one-page panel order balanced the interest of the government in efficient and cost-effective civil regulatory investigations against the interests in grand jury secrecy by allowing disclosure of grand jury materials for subsequent civil proceedings only to the extent that they would have been discoverable by government civil investigative devices. To implement this solution, the Supreme Court and Congress should revisit the federal grand jury secrecy rule.
Part II of this Article is an historical analysis. It examines the grand jury system as it originated in England and developed in colonial America. Part II also focuses on the evolution of the grand jury's function from a powerful tool for the monarch to a shield protecting citizens from the king's abuses.
Part III addresses the critical role secrecy has played in the evolution of the grand jury system in America. It examines secrecy interests in the context of the purpose for disclosure, suggesting that when disclosure is sought by the government for use in civil regulatory actions, the courts must consider the defendant's interest in a fair civil trial process.
Part IV focuses on the 1946 codification of the common law rule of grand jury secrecy into Federal Rule of Criminal Procedure 6(e). A detailed analysis of the rule's drafting history reveals congressional concerns over illegal or unauthorized use of grand jury information in government civil proceedings and a legislative intent that grand jury materials only be disclosed to government attorneys handling criminal prosecutions.
Part V discusses the different approaches taken by the lower courts in permitting disclosure of grand jury materials in government civil litigation after the codification of Rule 6(e). The most significant of these is the fair process approach taken by Maryland & Virginia Milk Producers Ass'n. This rather simple, common-sense concept forms the bedrock for the thesis of this article.
Part VI discusses the Supreme Court's decision in United States v. Procter & Gamble Co., the Court's first opportunity to address grand jury secrecy in terms of civil disclosure. Analysis of Procter & Gamble exposes the problems inherent in parallel civil and criminal investigations. Part VI also examines the nine-year discovery battle between the United States and Procter & Gamble, revealing that disclosure of grand jury material to government civil attorneys provides an incentive for abuse of the grand jury system and can create a substantial imbalance in civil discovery.
Part VII discusses the emerging concern over civil use of grand jury materials in the context of federal administrative agency access to such information. Enabling legislation that created agencies with substantial civil and criminal enforcement powers presented significant grand jury secrecy issues parallel to those examined in Procter & Gamble. Questions also arose concerning the extent to which agency personnel could gain access to grand jury materials by assisting the prosecutor with the grand jury investigation. Part VII also traces case law that eventually prompted legislative action amending Rule 6(e).
Part VIII analyzes the legislative history of the 1977 amendment to Rule 6(e), which demonstrates congressional efforts to limit civil regulatory use of grand jury material, and the 1981 proposed amendment that clarified Congress's intent. The 1977 amendment expanded Rule 6(e) disclosure exceptions and authorized disclosure of grand jury materials to government personnel to assist prosecutors in their duties. The 1981 proposed amendment, ultimately tabled in committee, would have expressly limited the term "attorney for the government" to permit automatic disclosure of grand jury materials only to government prosecutors conducting criminal investigations.
Part IX reviews United States v. Sells Engineering Corp.3 and United States v. Baggot, the seminal Supreme Court decisions that interpreted the 1977 amendment to Rule 6(e). Sells and Baggot clearly held that government civil attorneys are not permitted automatic access to grand jury materials to aid in civil proceedings. Part IX also focuses on the Court's concerns over grand jury abuse and the disparity in civil discovery when government attorneys use grand jury materials in subsequent civil proceedings. Although these cases provided a prophylactic bright-line rule that protects the individual, they failed to adequately balance that interest against the cost to the government of duplicate investigations. As in Procter & Gamble, the Supreme Court failed to consider the fair approach taken in Maryland & Virginia Milk Producers Ass'n.
Parts X, XI, and XII trace the evolution of the grand jury secrecy rule since Sells and Baggot, pointing out the ever-competing interests in efficient civil investigations and the need for grand jury secrecy. These sections reveal that grand jury secrecy is being eroded to avoid the extensive costs and delays that occur when governmental agencies must duplicate grand jury investigations for subsequent civil proceedings.
This Article is also a response to Professor Graham Hughes' recent Vanderbilt Law Review article, which proposed coordinating federal compulsory process and modifying the federal grand jury secrecy rule. Professor Hughes thoroughly explored the difficulties and inefficiencies inherent in parallel criminal and civil investigations in light of modern practice and suggested that separation of the two processes is artificial. Professor Hughes recommended eliminating the requirement that disclosure of grand jury materials to the government be made only "preliminarily to a 'judicial proceeding,' " thus allowing disclosure for civil regulatory investigations. He also proposed lowering the standard required for federal civil attorneys to gain access to grand jury materials from a "particularized need" to a "substantial need." While this Article acknowledges the difficulties surrounding parallel investigations, and agrees modification of Rule 6(e) is necessary, it rejects Professor Hughes' solution as not affording citizens the requisite fair process.
Finally, part XIV concludes that the all-or-nothing approach taken by the courts, Congress, and commentators can be avoided by adopting the solution proposed in Maryland & Virginia Milk Producers Ass'n, which equitably balanced the interest in cost-effective civil regulatory investigations against the interest in protecting the secrecy of the grand jury process, thus providing fair process to the individual.
The U.S. Supreme Court has stated that "our constitutional grand jury was intended to operate substantially like its English progenitor." An historical analysis of the grand jury thus helps to assess the role secrecy plays in the modern American grand jury system. This analysis reveals that grand jury secrecy serves two competing functions, which courts should enforce in a manner that equitably balances both roles.
The earliest progenitor of our grand jury had two main functions: to accuse criminals and to extend the central government throughout England. In twelfth-century England, criminal charges were prosecuted essentially by individuals, with the king acting as "a super-privileged individual." The king was thus personally involved in the medieval criminal justice system. With the promulgation of the Assize of Clarendon in 1166, King Henry II established a system of local informers (twelve men from every hundred or four men from every vill) to tell him who was suspected of "murder, robbery, larceny, or harbouring criminals." The king's system, which superseded baronial and ecclesiastical jurisdiction, made the king the beneficiary of the fines and forfeitures that attended the accusations. The system required the twelve men to report all suspects and fined them if they failed to indict any suspect or even if they failed to indict an acceptable number of suspects. The twelve men secretly named violators to give the sheriff a chance to seize those who were indicted. Those whom the twelve men accused were tried by ordeal, which forced the suspects to prove their innocence by overcoming the laws of nature. Since the "trial" was punishing, if not actually fatal, the accusation by the king's twelve men was the beginning and end of fundamental fairness in the twelfth-century.
The twelve men were also empowered to conduct other business of the monarchy. For example, in 1188, the twelve men became tax assessors for the Saladin Tithe. Shortly after the reign of Henry III ended in 1272, the twelve men were looking into the condition and maintenance of public works, including highways, bridges, and jails. During this same time period, the twelve men were sworn to secrecy. Nevertheless, the twelve men turned the information gathered from their inquiries over to itinerant justices sent by the monarchy. These justices had the power to interrogate each of the twelve men to determine how they arrived at their findings.
Significantly, in 1215, King John was forced by his barons to sign the Magna Carta, which delineated individual protections of life, liberty, and property by order of law. This revered document did not specifically address the issue of grand jury secrecy. It did, however, introduce the concept of due process against which any procedural practice must be measured.
During the reign of Edward III (1312-1377), the twelve men were superseded by twenty-four knights chosen by the county sheriff, who had authority for beginning a prosecution. The knights were called "le grande inquest." Their jurisdiction over the indictment process had no statutory authorization, but rather developed as part of the common law. Meanwhile, the twelve men, having lost their original inquisitorial jurisdiction, became known as the petit jury, which had responsibility for rendering a verdict of innocent or guilty in capital crimes. Therefore, by the fourteenth century, the developing criminal common law included two salient procedural devices: an indicting grand jury and an adjudicating petit jury.
In 1642, the English legal philosopher Edward Coke interpreted the Magna Carta provision "Nullus liber homo capiatur, aut imprisonetur" as preserving life, liberty, and property subject to the "law of the land." William Blackstone interpreted Coke's "law of the land" to require a two-tier process before a person could be deprived of (at least) life. The vote by the grand jury in the first proceeding determined whether there was probable cause to believe that the individual accused was guilty of the crime charged; the vote by the petit jury in the second proceeding determined whether there was enough evidence to convict. The petit jury provided little protection to the innocent accused, however, because the king often fined or imprisoned jurors who refused to convict. Reacting to this monarchical abuse, the grand juries began to shift their focus away from mere accusation to considerations of fairness for the individual accused.
Two celebrated cases became the catalyst for writers to define the rights and powers of English grand juries. When pro-Protestant grand juries in London refused to indict Catholic King Charles II's enemies, Lord Shaftesbury and Stephen Colledge, the grand jury became an institution "capable of being a real safeguard for the liberties of the subject." For the first time, grand juries were positively identified as something other than enforcement agencies of central government; they also existed for the protection of the accused.
The American colonies were slow to import the grand jury from England. It was not until 1635 that the first regular grand jury was established. Before grand juries, the colonies used "assistants," whom the English monarchy authorized to make the laws, accuse suspects, and sit in judgment of criminals. Having no checks or balances, the assistants were too powerful and abusive. In response to this abuse, one of the first American grand juries charged several of the assistants themselves with violations of the criminal law. Thus, decidedly unlike its English progenitor, the American grand jury originally began, not as an arm of the executive, but as a defense against monarchy. It established a screen between accusations and convictions and initiated prosecutions of corrupt agents of the government. Therefore, the English progenitor upon which the American grand jury was modeled was the more enlightened protective grand jury of the 1600s.
In the early American experience, the grand jury also became more a part of local government than it had apparently been in England. For example, in the early development of the Massachusetts grand jury, town officials were presented for neglecting to repair the stocks and for failing to repair the highway. The Virginia grand juries became part of the county court system in 1662 and met twice a year to levy taxes, oversee spending, supervise public works, appoint local officials, and consider criminal accusations. By the middle of the 1700s, the Connecticut grand jury was helping to levy taxes and conduct other local government work while a public prosecutor took primary responsibility for investigating crime. In the Carolinas, Georgia, Maryland, New Jersey, and Pennsylvania, the pattern was similar: in addition to screening criminal accusations, American grand juries took an active role in local government and had sufficient independence to announce dissatisfaction with government.
As the colonies moved closer to revolution, the grand jury took on a third role: outright resistance to the monarchy. Three successive grand juries refused to indict John Peter Zenger, whose newspaper criticized the withdrawal of jury trials and the royal control of New York. While the King was withdrawing the right to trial by jury and attempting to initiate prosecutions by informations, colonial grand juries responded by making "stinging denunciations of Great Britain and stirring defenses of their rights as Englishmen." Newspapers often republished these criticisms.
After the Revolution, the centralized government was created without a federal grand jury. The Constitution created three separate branches of government and delineated the powers of each, but did not establish grand juries. Nor were grand juries established in the Judiciary Act of 1789, which set up the federal court system. However, after passing the Judiciary Act, Congress approved twelve constitutional amendments for ratification by the states. In 1791, the Fifth Amendment was adopted as part of the Bill of Rights, with its Grand Jury Clause insuring that "[n]o person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury . . . ." The Grand Jury Clause protected the people against arbitrary and overzealous government by protecting "against hasty, malicious and oppressive prosecution." Secrecy in grand jury proceedings played a role in that protection.
In the beginning, the grand jurors' oath established the secrecy requirement. When grand juries were simply the monarch's investigatory bodies, the grand jury oath did not include secrecy. Secrecy was part of the grand jury process to prevent escape by suspected criminals. By the fourteenth century, however, secrecy was a part of the grand jurors' oath. With the shroud of secrecy came independence from the king. By 1681, the monarch's justices could no longer oversee jury deliberations, even though some justices still claimed the authority to conduct the inquiry in public if the king so desired. At this time, the grand jurors' oath resembled the basic form administered to grand jurors in 1946, when the Federal Rules of Criminal Procedure were first established.
The purpose of the secrecy requirement was, in the earliest days, interpolated primarily by legal scholars. Of the legal scholars writing about the grand jury in the late seventeenth century, John Somers is not only representative, but eminent, having been read in both England and the colonies. In his monograph on the grand jury, Somers described how grand jurors were sworn not to disclose the subjects of the inquiry, the witnesses, or any of the evidence. In addition, grand jurors were sworn not to reveal their own personal knowledge, the knowledge of their fellow jurors, their investigative plans, or their deliberations. The reasons, according to Somers, were first, to prevent the flight of criminals; second, to find out whether witnesses were biased; third, to be free from judicial oversight; fourth, to catch witnesses in their lies; and fifth, to permit the full development of evidence for a possible indictment some time in the future. According to Somers, all of these secrecy interests accrued to the king. However, according to Somers, the interests which benefited the king protected his subjects because the grand jury existed to protect the innocent accused just as much as the innocent victims of crime. Secrecy made possible the discovery of truth and protected individuals from malicious or hateful prosecution. In sum, neither the king, the general public, nor the individual accused could benefit by making public the proceedings of a grand jury.
The Grand Jury Clause of the Fifth Amendment made grand jury secrecy an implicit part of American criminal procedure. The first challenges to the rule of secrecy were made by criminal defendants seeking to set aside their indictments based upon insufficiency of evidence or prosecutorial misconduct before the grand jury. Secrecy, hailed as the protector against monarchical abuse, was, ironically, being challenged as a shield for that abuse.
In one of the first reported secrecy cases, United States v. Smith, decided fifteen years after the Bill of Rights was ratified, a federal district court in New York indicated that an accused could attack the veil of secrecy. In Smith, the defendant filed a plea in abatement challenging an indictment alleged to be based upon illegal evidence. The prosecution argued against lifting the veil of secrecy, claiming a plea in abatement could not be made against grand jury actions because secrecy made grand juries "independent and irresponsible." The defense argued fair process and contended that secrecy should not shield an improper indictment. The court concluded that a challenge to the indictment could be made, implicitly accepting the defense argument that the rule of grand jury secrecy protected the individual accused and, consequently, could be lifted where secrecy defeated that purpose.
As courts continued to adjudicate defendants' motions for access to grand jury material, two interests—other than the defendant's interest in fairness—emerged. First, there was a concern that tampering with grand jurors might occur, eroding public confidence in the grand jury institution. Second, blocking a defendant's access to grand jury materials would allow trials to be free from perjury. The balance between the need for secrecy and the need for disclosure began to tip against the defendant. The majority of these early cases determined that the interests of law enforcement, which favored secrecy, outweighed the defendant's need for disclosure. These decisions were not surprising in the context of the state of criminal law and procedure in the 150 years after the adoption of the Bill of Rights. They were in keeping with the limited rules of criminal discovery and the recognition that a trial by jury should safeguard the defendant.
The issue of grand jury secrecy arose later in a First Amendment context. In 1917, a Rhode Island federal district court addressed the issue of widespread public disclosure of grand jury proceedings in United States v. Providence Tribune Co. The court cited the newspaper for contempt for printing an article divulging information from a grand jury probe. Deciding that the fair administration of justice required a finding of fact that the newspaper was in contempt for making the secret grand jury sessions public, the court held that the mere publication of the article about the continuing grand jury probe was an obstruction of justice. The court analyzed the historical justifications for grand jury secrecy and, perhaps influenced by John Somers' treatise, listed six interests in secrecy: (1) preventing the escape of offenders; (2) preventing the destruction of evidence; (3) preventing tampering with witnesses; (4) preserving the reputations of innocent persons whose conduct comes under the grand jury's investigation; (5) encouraging witnesses to disclose their full knowledge of possible wrongdoing; and (6) preventing undue prejudice of the public jury pool. The interests in secrecy that accrued to the government, the accused, and the grand jury were weighed against the newspaper's First Amendment interest in publishing the grand jury information. The court found that all of the historical interests weighed in favor of secrecy for the fair administration of justice. In this context, no one would benefit from the disclosure, except perhaps the newspaper through increased sales. Thus, the decision fairly protected both the interest in law enforcement and the individuals involved.
In the early 1930s, in United States v. Amazon Industrial Chemical Corp., a criminal case, and In re Grand Jury Proceedings, a civil regulatory case, the courts addressed problems that did not involve the defendant's access to grand jury matters. In Amazon, the defendant challenged an indictment because a stenographer had been present during the grand jury proceedings and had transcribed the proceedings in violation of the secrecy rule. The defendant claimed that the possibility of improper influence upon the grand jury had violated his constitutional rights. Although it agreed that the opportunity for improper influence was a real threat, the Maryland federal district court nonetheless concluded that a defendant must prove actual prejudice to have an indictment dismissed. The court acknowledged that the grand jury was adopted as a protection against oppressive governmental action. It stated, however, that "[i]n this country, from the popular character of our institutions, there has seldom been any contest between the government and the citizen which required the existence of the grand jury as a protection against oppressive action of the government." Evaluating the reasons for grand jury secrecy set forth in Providence Tribune, the Amazon court concluded that these reasons were for the protection of the grand jury itself as an independent representative of the public for finding truth, and that none were based upon constitutional guarantees for the criminally accused. The court cloaked grand jury proceedings with a presumption of regularity, which inherently placed the fairness of the proceeding in the discretion of a prosecutor, the representative of the executive branch.
The Amazon court's analysis of the purposes for secrecy seemingly contradicts its conclusion that secrecy has no basis in the constitutional rights protecting the criminally accused. Secrecy protects the ultimate truth-finding function of the grand jury. This truth-finding function, however, is intended to protect the individual against unfounded prosecutions. Moreover, the Fifth Amendment guarantees that no person shall be held to answer for a crime unless on an indictment of a grand jury. This constitutional protection also was established to protect the individual against unfounded prosecutions. Therefore, secrecy is arguably based upon the Fifth Amendment right of the individual to be free from unfounded prosecutions.
Like many early decisions, Amazon distinguished between the grand jury process and the stringent due process requirements of a criminal trial. This analysis, when viewed in the context of the unpredictable "secrecy" jurisprudence of that era, erroneously emphasizes that the criminal trial process should serve as a screen against unfounded prosecutions caused by failure of the grand jury process. That error is compounded when the analysis is applied to the civil arena.
The issue of disclosing grand jury materials for use in a civil action was first addressed two years later, in In re Grand Jury Proceedings. In that case, the government initiated regulatory proceedings to revoke Union City Brewing Company's beer license. Prior to these proceedings, prosecutors had conducted a grand jury investigation into possible violations of the National Prohibition Act. The grand jury elicited information relevant to the revocation hearing, and the supervising court, upon the agency's motion, allowed disclosure of the grand jury materials for use in that hearing. The court, citing criminal cases, claimed authority for disclosing grand jury materials to the government agency in the name of justice. The court, almost echoing Amazon, stated:
The rule of secrecy, it will be noted, was designed for the protection of the witnesses who appear and for the purpose of allowing a wider and freer scope to the grand jury itself, and was never intended as a safeguard for the interests of the accused or of any third person.Therefore, the court refused to accept the contention that a fundamental purpose in protecting the grand jury's "wider and freer scope" of investigation was ultimately to protect the accused against oppressive prosecutions.
The early case law thus began to point out different secrecy considerations in criminal and civil cases, as well as the competing interests of law enforcement and the protection of the individual. When a government attorney seeks access to grand jury materials for use in a civil regulatory proceeding, the central interest from a defendant's point of view is not protection of the investigative role of the grand jury; rather, the interest is whether grand jury information may be used against an individual to initiate a civil enforcement action, where the burden of proof on the government is a preponderance of the evidence rather than proof beyond a reasonable doubt. An examination of this important question presents due process considerations relating to the fundamental fairness of disclosure of grand jury materials for use in civil proceedings. Congress first began to address these secrecy issues in 1946.
The Supreme Court created the Federal Rules of Criminal Procedure, which became effective on March 21, 1946. The purpose of the Rules, as stated in Rule 2, was "to provide for the just determination of every criminal proceeding . . . to secure simplicity in procedure, fairness in administration and the elimination of unjustifiable expense and delay." The Rules balanced the need for enforcing laws against the necessity of safeguarding fundamental rights of the accused. The Department of Justice believed such a balance was obtained under the new Rules. To achieve this balance, however, a great deal of preexisting common law criminal procedure was simplified, and some outmoded technical rules were completely eliminated. Significantly, the rule of grand jury secrecy was made into positive law in subsections (d) and (e) of Rule 6.
As adopted, Rule 6 included two grand jury secrecy provisions. The first provision limited who could be present during grand jury sessions, while the second imposed a general rule of secrecy with specific and limited exceptions. Civil adjudication and administrative regulation aided by the grand jury process were not widespread common law practices and were not contemplated in the new procedural grand jury rule.
It was even unclear whether the common law permitted prosecuting attorneys in grand jury proceedings when the Constitution was adopted, but the practice had become widespread by 1946. Consequently, Rule 6 contained an exception that allowed automatic disclosure of "matters occurring before the grand jury, other than its deliberations and the vote of any juror" to "attorneys for the government." A second exception allowed witnesses to disclose their own testimony in the interests of justice. The third exception allowed disclosure as directed by the supervising court "preliminarily to or in connection with a judicial proceeding." The fourth and final exception, no doubt influenced by the conflict in earlier case law, allowed disclosure to a defendant for the purpose of dismissing an invalid indictment.
When criminal grand jury investigations overlap with civil regulatory inquiries, the government has both procedural and cost-saving incentives to seek grand jury discovery in parallel civil or administrative proceedings. The first and third exceptions allowing disclosure to "attorneys for the government" and "preliminarily to or in connection with a judicial proceeding" have therefore resulted in prolific litigation seeking broad judicial construction of the phrases. The drafting history of Rule 6(e) shows how the secrecy requirement was intended to limit grand jury access by Department of Justice civil attorneys and other federal agency attorneys.
The preliminary draft of Rule 6(e) was proposed as Rule 7(e). As distributed to the bench and bar, preliminary Rule 7(e) provided in part that:
A juror, attorney, interpreter, clerk, or stenographer may disclose matters occurring before the grand jury only when so directed by the court preliminarily to or in connection with another judicial proceeding or when permitted by the court at the request of the defendant upon a showing that grounds may exist for a motion to dismiss the indictment because of matters occurring before the grand jury, and in that case disclosure may also be made to the attorney for the government.Government attorneys and judges were concerned about this language, which seemed to preclude the U.S. Attorney presenting a criminal case to the grand jury from obtaining grand jury transcripts without a court order. Also, when Congress enacted the Rules, the courts were already experiencing the phenomenon of parallel criminal and civil (or administrative) proceedings arising from a common factual nexus. Written comments submitted to the drafters focused attention on the potential use of criminal grand jury information in civil and administrative agency investigations and litigation. In fact, one prescient U.S. Attorney specifically recommended tightening the language to preclude the possibility that any attorney associated with the government, whether presenting a criminal case or not, might lift the shroud of secrecy and gain access to grand jury materials for civil enforcement purposes. The Advisory Committee ultimately changed the language of the draft. As rewritten, the second preliminary draft of what is now Rule 6(e) included a new first sentence that opened the grand jury proceedings to the "attorneys for the government."
As finally adopted, the Rule specified that grand jury materials could be disclosed to attorneys for the government "for use in the performance of their duties." By way of guidance, the Advisory Committee's notes stated: "Government attorneys are entitled to disclosure of grand jury proceedings, other than the deliberations and the votes of the jurors, inasmuch as they may be present in the grand jury room during the presentation of evidence." Otherwise, the Rule required secrecy except under court-supervised disclosure. Given the concerns the Advisory Committee addressed—as well as the underlying purpose of the Federal Rules of Criminal Procedure, the arguably defendant-oriented purpose behind the witness exception, and the lack of a civil enforcement agency exception—the Committee intended the language adopted in Rule 6(e) to allow automatic grand jury disclosure to government attorneys only for criminal prosecutions on which they were working.
In the 1940s, the creation of many administrative agencies with overlapping criminal and civil enforcement powers exacerbated the potential use of grand jury information by civil government attorneys. Two issues emerged: first, whether Congress intended Department of Justice civil attorneys and other administrative agency attorneys to have access to grand jury materials for preparation of civil cases (and if so, whether they were to have automatic access as an "attorney for the government"); and second, by what standard would a private party be allowed access to grand jury information. The lower courts disagreed over whether to permit access to grand jury materials, regardless of whether the party seeking disclosure was public or private.
In In re April 1956 Term Grand Jury, the Seventh Circuit vigorously protected grand jury secrecy in a case that continued for almost eight years. The litigation involved criminal and civil investigations of alleged tax evasion. The Department of Justice had appointed Treasury Department agents who were actively involved in both inquiries as "assistants" to the grand jury. The grand jury subpoenaed documents—many of which the Treasury Department had originally requested—turned the documents over to the agent assistants, and then recessed for a week. The targets of the investigation petitioned the federal district court to examine the grand jury minutes, question the grand jurors concerning the conduct of the agents, and hold in contempt any Treasury agents that had perused grand jury materials outside the scope of the grand jury investigation. The district court dismissed the petition, and the targets appealed, claiming that such misuse of grand jury powers violated their Fourth and Fifth Amendment Rights. The Seventh Circuit agreed, holding that opening the envelope of grand jury secrecy to government agents becomes a constitutional violation of Fourth and Fifth Amendment protections the moment that the otherwise-protected grand jury matters are used "in any manner for the purposes" of a civil proceeding. Although the court would not condone interference with the grand jury's actions in making the disclosures to the Treasury Department, it did determine that the targets of the investigation could invoke the court's supervisory powers to protect their constitutional rights.
On the other hand, in In re Petroleum Industry Investigation, a Virginia federal district court adopted the policy urged by the government. The court held that the government should be able to use information gained by grand jury criminal process for civil litigation. The court also found that the absence of other means of gathering the evidence was irrelevant to the court's determination of whether to allow penetration of the grand jury.
The D.C. Circuit articulated a third approach to the secrecy issue in Maryland & Virginia Milk Producers Ass'n v. United States. The court adopted a well-balanced solution: it allowed government attorneys to retain and use grand jury materials for subsequent civil proceedings, but only to the extent that those materials would have been discoverable through civil discovery devices. The precise procedure outlined by the court placed the onus on the government to give the defendants notice of its intention to use grand jury materials sixty days before the civil proceeding occurred. Thus, the procedure provided defendants the same opportunity to challenge the requested disclosure that they would have if the government had utilized civil investigatory devices. This procedure fairly weighed the government's interest in civil law enforcement against the interest in protecting individuals from the abusive use of grand jury powers for civil discovery.
In its one-page panel order, the D.C. Circuit provided the linchpin for a fair grand jury process. Although few courts have adopted the language and wisdom of Maryland & Virginia Milk Producers Ass'n, its importance to grand jury jurisprudence cannot be overemphasized. The order provided an equitable solution to problematic discovery issues in parallel proceedings. Thus, the court's analysis should profoundly affect the next revisitation of this issue by the Supreme Court's and any lower courts.
Having no guidance from the Supreme Court on this problematic and perplexing issue, however, courts often lifted the veil of grand jury secrecy for civil use in the decade following promulgation of Rule 6(e) by applying a standard that questioned whether "the ends of justice" demanded such disclosure. The government often sought and received disclosure of grand jury materials for preparation of civil cases; consequently, civil defendants often requested reciprocal disclosure to prepare a defense. Many of the decisions granting civil defendants reciprocal access to grand jury materials in the 1940s and 1950s expressed concern for fundamental fairness of process and parity between the parties. But these decisions were inconsistent, confusing, and provided no clear guidance to government counsel or defendants. The Supreme Court was slow to address this critical aspect of Rule 6(e).
In 1956, twelve years after promulgation of Rule 6(e), the Supreme Court first addressed the civil use of grand jury materials in United States v. Procter & Gamble Co.3 Procter & Gamble was a classic "big case" under the Sherman Antitrust Act. Like all "big cases," this case involved possible criminal and civil liabilities and engendered both criminal and civil investigations. The clash between the civil and criminal rules of procedure and the need for a definitive ruling on the use of grand jury materials in civil litigation compelled the Supreme Court to grant certiorari.
Procter & Gamble began with an eighteen-month-long grand jury investigation into possible criminal violations of the Antitrust Act by the corporation. The grand jury's term expired without an indictment. The United States then filed a civil enforcement action under section 4 of the Sherman Act. Thereafter, the government sought and received from the district court a civil discovery order compelling Procter & Gamble to produce approximately 800 documents. These same documents had been subpoenaed by the grand jury. The government's civil discovery motion, in fact, identified the documents by the very exhibit numbers placed upon them when they were produced for the grand jury. Procter & Gamble produced the documents and then, to prepare for trial, moved for disclosure of the entire grand jury transcript under Rule 34 of the Federal Rules of Civil Procedure.
Procter & Gamble claimed that the ends of justice required reciprocal access because the United States had used and would continue to use grand jury materials in its civil enforcement action. The Department of Justice, arguing against reciprocal disclosure, admitted that the grand jury had been convened to investigate both criminal and civil violations of the Sherman Act, and claimed a right and a duty to use grand jury materials for the preparation of related governmental civil actions. The district court, while acknowledging that the government's use of grand jury materials in the civil case was not at issue, took the government's nonreciprocal use of grand jury material into consideration to determine whether disclosure of the entire transcript to Procter & Gamble was warranted.
Aligning itself with earlier decisions that focused on the "ends of justice" standard in granting reciprocal access, the district court ordered disclosure of the requested grand jury minutes to establish parity in trial preparation. While the government's prior and continuing nonreciprocal use of grand jury transcripts was "perhaps sufficient" in and of itself to justify granting the defendant's discovery request, the discovery benefit in this case, where the government had not even identified the issues for trial, was of primary importance to the court's decision to lift the grand jury veil of secrecy.
The government appealed to the Supreme Court on one issue: whether a private defendant could gain access to grand jury transcripts under Federal Rule of Civil Procedure 34. The Supreme Court, like the district court, weighed the fair trial objectives of civil discovery against the "long established policy that maintains the secrecy of the grand jury proceedings . . . ." The Court, while acknowledging that the United States was subject to the rules of civil discovery, determined that Procter & Gamble had not met the "good cause" requirement of Rule 34. The Court concluded that the "good cause" necessary to justify grand jury disclosure required a showing of "compelling necessity" without which "a defense would be greatly prejudiced or that without reference to it an injustice would be done." The Court also noted that this necessity "must be shown with particularity," thus establishing a "particularized need" standard for disclosure. Applying the criteria, the Court held that Procter & Gamble would not be prejudiced merely because use of ordinary civil discovery rules would involve delay and substantial costs.
While the government's use of grand jury transcripts was not directly at issue in the appeal, the Court, recognizing that the district court's decision rested heavily upon that question, noted in dictum that there had been no finding of fact that the government had used the grand jury process solely to elicit evidence for the civil proceeding. The Court also noted, however, that "[i]f the prosecution were using that device, it would be flouting the policy of the law," and "wholesale discovery" to the defendant would then be an appropriate remedy. Nevertheless, the Court did not find that the government's mere use of grand jury materials in Procter & Gamble presented the same concerns; and, in the final analysis, the case failed to address the real issue of grand jury secrecy.
The holding of Procter & Gamble placed a heavy burden upon civil defendants seeking to gain access to grand jury materials: they either must show particularized need for the material or must prove that the prosecutor subverted the grand jury process. Moreover, the majority provided no standard for assessing either government subversion or the need for access to grand jury materials. Procter & Gamble created a substantial imbalance in civil discovery and left the lower courts in the same state of confusion as before.
Agreeing with the majority that there was no finding by the district court that the government had used the grand jury investigation for a civil purpose, Justice Whittaker, in a concurring opinion, recognized that the Department of Justice probably impaneled grand juries for precisely that purpose in similar cases. Condoning this breach of the secrecy rule would, in his opinion, encourage government attorneys to abuse the grand jury process. Therefore, he concluded that fundamental fairness and concerns of grand jury abuse justified requiring government attorneys to show the same particularized need for access to grand jury materials as any private litigant.
The Procter & Gamble Court missed the opportunity to directly address the critical secrecy issue. The decision foreclosed trial courts from granting reciprocal disclosure to defendants for the purpose of insuring parity in discovery. Consequently, the focus of grand jury disclosure litigation inevitably shifted to the propriety of governmental breaches of the secrecy rule.
Immediately after the Supreme Court's decision, the parties resumed battle in the district court. Procter & Gamble attempted to establish a "finding of fact" that grand jury abuse had occurred. For the next two years, the trial court rendered decisions that interpreted and applied the Supreme Court's guidelines to ever-expanding discovery issues. The trial court first determined that proof of subversion of the grand jury process at some point during the grand jury proceeding only warranted discovery of the minutes transcribed after that time. The point at which the subversion occurred identified the breach of grand jury secrecy; therefore,
[t]he critical question . . . is, when this case first became only "a civil case." From that time on, our highest court has said that using the Grand Jury to elicit evidence in that case would flout the law, would subvert criminal procedure, would require that any advantage thus obtained improperly by the Government be wiped out, by giving the opposing party the use of so much of the Grand Jury transcript as was thus obtained by a criminal procedure in a purely civil case.The court further concluded that a defendant had the right to discover government information that would prove the point at which subversion of the grand jury began, holding that no presumption of regularity or privilege would bar such discovery.
After discovery compliance by the government revealed evidence of at least partial abuse of the grand jury proceeding, the district court made a "finding of fact" that abuse had indeed occurred. Procter & Gamble immediately moved to suppress or impound all evidence gained through the breach of secrecy. Finding that the Supreme Court had indicated that reciprocal access was the appropriate remedy, the court denied the motion. Therefore, the court granted Procter & Gamble disclosure of grand jury testimony to the extent it had proven grand jury abuse. To do otherwise, the court reasoned, would "put an end to the Government's case" and make it impossible for the Department of Justice to enforce antitrust laws.
Dissatisfied with this decision, Procter & Gamble set out to prove that the government had subverted the entire grand jury proceeding. Through civil discovery, it obtained proof that the Department of Justice had convened the grand jury knowing an indictment was improbable; in fact, the government had always planned to seek a civil remedy. Faced with this clear evidence, the district court granted full disclosure of grand jury transcripts to Procter & Gamble. Nine years of litigation finally ended with proof of grand jury secrecy abuse that required reciprocal access in the name of fairness.
The potential for abuse of grand jury secrecy, while not the focal point of the Supreme Court's decision in Procter & Gamble, at least established such abuse as a critical concern in the context of such epic civil antitrust litigation. However, given the example of Procter & Gamble, the administration of justice would be better served by the equitable approach adopted in Maryland & Virginia Milk Producers Ass'n. This approach would serve the needs of civil law enforcement yet still protect the due process rights of the individual by discouraging grand jury abuse.
Issues pertaining to the propriety of the Department of Justice's use of grand jury materials for civil litigation were not the only concerns arising from the 1946 codification of Rule 6(e). A similar question about administrative agency access to grand jury materials quickly surfaced. The investigative powers of federal administrative agencies are more limited than those which a grand jury may employ in criminal investigations, and agency actions are statutorily subject to judicial review. Although certain federal statutes grant administrative agencies subpoena powers when they are necessary to carry out the agencies' investigative and adjudicatory functions, gathering information in this manner often proves more costly and frustrating than obtaining the materials from the grand jury. Thus, administrative agencies, like the Department of Justice's own civil attorneys, have attempted to seek information from a particular grand jury to circumvent their more restrictive investigation scheme. This has resulted in Rule 6(e) disclosure litigation.
The Advisory Committee was aware of the agencies' role in law enforcement while drafting the Federal Rules of Criminal Procedure. Indeed, Congress enacted the Administrative Procedure Act concurrently with the completion of the Rules. Congress created the Act to establish uniform procedures for all federal agencies and to serve as a "check upon administrators whose zeal might otherwise have carried them to excesses not contemplated in legislation creating their offices." Additionally, the Advisory Committee was asked specifically to resolve the issue of administrative agency access to grand jury materials. Unfortunately, Rule 6(e), as finally adopted, did not do so. Thus, trial and appellate court decisions concerning disclosure to federal agencies were far from uniform.
The first and leading appellate case dealing with the disclosure of grand jury material to federal agencies was Doe v. Rosenberry, decided the same year as Procter & Gamble. In Rosenberry, a federal grand jury had been investigating a New York attorney's alleged criminal activity. While the grand jury did not return an indictment, it did refer information concerning the attorney's activities to the New York Bar Association's Grievance Committee. The Committee then sought and obtained a court order for disclosure of grand jury transcripts under Rule 6(e). The attorney challenged the order on the grounds the investigation was not conducted "preliminarily to . . . a judicial proceeding" within the meaning of Rule 6(e). A court cannot grant an order for disclosure, even where particularized need exists, if this threshold criterion is not met. The decision in Rosenberry, therefore, turned upon the meaning of "preliminarily to."
In assessing whether disclosure was appropriate, the court employed a two-prong test: first, whether any hearing before the grievance committee was "preliminary to" any charges of unprofessional conduct that might take the matter into court; and second, whether any court proceeding was a "judicial proceeding" under the Rule. The court defined a "judicial proceeding" broadly to include "any proceeding determinable by a court, having for its object the compliance of any person, subject to judicial control, with standards imposed upon his conduct in the public interest, even though such compliance is enforced without the procedure applicable to the punishment of crime." Finding that the two-prong test had been met, the court upheld the disclosure order but never addressed what standard of need was required before disclosure would be allowed. The court posited a test that balanced the public interest in maintaining the integrity of the bar against the appellant's interest in grand jury secrecy.
Procter & Gamble, however, did set forth the standards of need for private parties seeking disclosure. Whether those same standards applied to federal agencies became the subject of litigation. Initial decisions held that federal agency attorneys were not allowed automatic access as "attorney[s] for the government" under Rule 6(e) and that the "particularized need" standard set forth in Procter & Gamble applied to federal agencies seeking court-ordered disclosure. Some courts were not as certain that they should interpret Rule 6(e) so narrowly, however, especially where a U.S. Attorney sought a disclosure order to acquire assistance from a federal agency attorney on a criminal case being investigated by a grand jury. One case in particular that raised this issue and eventually prompted congressional action was In re William H. Pflaumer & Sons, Inc.
In Pflaumer, the federal district court was confronted with the overlapping enforcement duties of the Internal Revenue Service's criminal and civil investigation divisions in a racketeering and tax case against Pflaumer & Sons' beer distributing company. Surveying the limited case law, Judge Becker found that courts uniformly refused to condone automatic exceptions to grand jury secrecy for the IRS, the Federal Trade Commission, and the Tennessee Valley Authority. However, citing the Advisory Committee's notes for Rules 6(e) and 54(c), the court found no guidance on what the drafters meant by "attorneys for the government." Judge Becker, therefore, decided to grant automatic disclosure to government agency personnel under an "aegis" theory. The disclosure, however, was automatic only for use in the criminal case before the grand jury. In expanding the terms of Rule 6(e), Judge Becker suggested that the rule needed clarification. Apart from Judge Becker's recommendation, there was no apparent urgency behind the resulting proposal to amend the Rule, particularly in light of the work that had already begun on plenary grand jury reform legislation.
The Advisory Committee prepared five amendments to the Federal Rules of Criminal Procedure in late 1972. However, the amendment proposing to clarify the first sentence of Rule 6(e) was not reported to Congress until April 26, 1976. It was soon afterwards that the Advisory Committee began deliberations to clarify the Rule 6(e) grand jury secrecy exceptions that had caused confusion and that were addressed by the proposed amendment. The primary focus was whether automatic disclosure of grand jury materials could be made to federal agency personnel in furtherance of the grand jury proceeding. If adopted as proposed in 1976, the Rule, it was argued, could have expanded the automatic exception to grand jury secrecy to include any employee within the federal government. According to Acting Deputy Attorney General Richard Thornburgh, grand jury investigations were a team effort that required limited secrecy breaches. It was common practice for agency lawyers to be appointed as Assistant U.S. Attorneys and expert witnesses, to explain evidence to the grand jury. To the Department of Justice, the 1976 proposal was simply intended to make all the grand jury evidence available to every legitimate member of the team; thus, the executive and judicial branches did not view Rule 6(e) as foreclosing unauthorized and automatic disclosure of grand jury material to agents of the government at the sole discretion of the prosecuting attorney conducting the grand jury investigation.
Nonreciprocal disclosure of grand jury materials to government agents would have created an unacceptable imbalance between the government and defendants in subsequent civil regulatory proceedings. The 1976 proposal attracted substantial criticism. It was, however, apparent that Rule 6(e) needed congressional attention.
The well-documented abuses of the grand jury process by the executive branch under President Nixon made the legislative branch skeptical of the judicial branch and unlikely to rubber stamp judicial promulgations of new grand jury rules. Consequently, a year later, on April 11, 1977, the House Committee on the Judiciary formally disapproved the substantive amendment to Rule 6(e). The Senate Committee redrafted the Rule. Eschewing the House plan to consider the exceptions to secrecy as part of an overall reform bill, the Senate recommended passage, and Congress finally adopted the proposed amendment, as modified, on July 30, 1977. It parsed Rule 6(e) into enumerated paragraphs, beginning with the general rule of secrecy and delimiting exceptions to that general rule. As explained in the Senate Report recommending passage, subparagraph (A) defined "automatic" but expressly limited disclosure exceptions to "an attorney for the government" and those personnel necessary to assist that attorney in the enforcement of criminal law. The Advisory Committee's notes to the 1977 amendment are in accord with the Senate Report and show an intention to limit disclosure, but only for the criminal case under consideration. To strengthen court supervision and resolve potential claims of improper automatic disclosure, the Senate substitute also added to subparagraph (B) new language that required a record of the personnel obtaining automatic access to grand jury material under subparagraph (A). Thus, the new language of Rule 6(e), congressional intent, and the Advisory Committee's position demonstrate that disclosure is automatic only when the material is sought to aid criminal prosecutions. The 1977 amendment did not affect the court-order exception by which access could be gained for civil use. As part of the inevitable congressional compromise, however, the Senate Report included language that seemingly encouraged court-ordered disclosure for civil or regulatory purposes. Thus, the resolution of the 1977 Rule 6 amendment, which reflected the never-ending dichotomy between law enforcement and the rights of the accused, presented questions for further litigation. The language of the amendment was ambiguous enough to leave open an argument that the criminal law limitation applied only to personnel assisting the grand jury and did not foreclose automatic disclosure to civil attorneys for civil use. Hence, the 1977 Amendment still failed to resolve the questions of civil use that emerged even prior to the 1946 codification.
In October 1981, the Standing Committee on Rules of Practice and Procedure circulated a thoroughly amended preliminary draft of Rule 6(e) to the bench, bar, and media. The secrecy revisions included:
(1) a definition of "matters occurring" in 6(e)(2);
(2) an express provision limiting disclosure only to an "attorney for the government" for criminal enforcement purposes in 6(e)(3)(A)(i);
(3) an additional exception under 6(e)(3)(C) allowing disclosure when a party in another proceeding has an independent basis for subpoenaing grand jury evidence;
(4) an additional exception under 6(e)(3)(C) allowing disclosure to another federal grand jury;
(5) a new section 6(e)(3)(D) establishing venue for disclosure petitions and affording interested parties notice of the petitions plus an opportunity to be heard;
(6) guidelines in a new section 6(e)(3)(E) for transferring grand jury materials to another federal district;
(7) a new section 6(e)(5) providing for closed hearings on matters relating to grand jury proceedings in order to keep secret past and pending or continuing grand jury proceedings; and
(8) a new section 6(e)(6) requiring grand jury records, orders, and subpoenas to be kept under seal.
Two years later, the Supreme Court transmitted slightly modified versions of proposals four through eight to Congress for adoption. The amendments strengthened the shroud of secrecy surrounding grand jury proceedings but ultimately did not address the civil access issues that have persisted since Procter & Gamble.
The first and third proposals were a response to the confusion over what constituted "matters occurring." The two proposals were withdrawn because, according to the Advisory Committee chairman, they were unnecessary. An examination of the next ten years of reported cases leads to the opposite conclusion, however. Clarifying the definition in the rule would have extended the shroud of secrecy over all the material subpoenaed by a grand jury and would have avoided litigation on the technicalities of how a grand jury uses books, papers, and documents. Instead, litigation over "matters occurring" proliferated, and the resulting decisions have not been uniform.
The second proposal, which would have explicitly limited disclosure to government attorneys "to enforce federal criminal law," was withdrawn by the Advisory Committee because the Supreme Court granted certiorari to decide whether the automatic disclosure exception for "attorneys for the government" extended to government civil attorneys.
In 1983, the United States Supreme Court finally and directly addressed the government's civil use of grand jury materials in United States v. Sells Engineering, Inc. and United States v. Baggot. Sells dealt with the Department of Justice's use of grand jury material for civil litigation, while Baggot addressed the issue of federal administrative agency access. Both cases, perhaps influenced by the proposed 1982 amendment, and certainly influenced by concerns of fundamental fairness addressed in lower court opinions, tightened the restrictions on civil use of grand jury material.
In Sells, the Supreme Court revisited the issues presented in Procter & Gamble, which Congress had consistently failed to clarify. The Sells Court definitively determined the standards by which Department of Justice attorneys could gain access to grand jury materials for use in civil actions.
Sells, like Procter & Gamble, involved parallel criminal and civil investigations and consequently raised the issue of misuse of the grand jury process. The case began as an IRS administrative audit of Sells Engineering, Inc. and related parties. The IRS, seeking the production of records in the investigation, issued administrative summonses, many of which the affected parties challenged. The federal district court ordered enforcement of all of the summonses except those pertaining to one partnership. Enforcement of the summonses was stayed pending an appeal of the decision. During the wait, the IRS referred the case to the Department of Justice for investigation into possible criminal charges of fraud and income tax evasion. The Justice Department convened a grand jury, which issued subpoenas that requested essentially the same materials sought by the IRS summonses. The documents were produced for the grand jury and, consequently, the IRS did not pursue enforcement of the administrative summonses.
As a result of its investigation, the grand jury indicted Sells Engineering and two of its officers, Peter Sells and Fred Witte, for conspiracy to defraud the government and for tax evasion. The defendants filed motions to dismiss the indictments, claiming abuse of the grand jury's function. However, late in the evening of the day before the motion was scheduled to be heard, the parties reached agreement on a favorable plea bargain (particularly as to sentencing), and the defendants entered guilty pleas. The defendants also withdrew their complaints of grand jury misuse.
After the pleas were entered, the government moved for disclosure of the grand jury materials to attorneys in the civil fraud division of the Department of Justice for use in a possible civil suit. The district court granted this request on the grounds that the civil division attorneys had automatic access as attorneys for the government under Rule 6(e)(A)(i). On appeal, the Ninth Circuit reversed, holding that civil attorneys only could gain access by meeting the standard originally set forth in Procter & Gamble. The Supreme Court granted certiorari.
Writing for the Court, Justice Brennan focused on the general reasons for grand jury secrecy, the limited policy reasons for granting government attorneys access to grand jury materials in criminal cases, and the legislative history of Federal Rule of Criminal Procedure Rule 6(e). Analyzing the historical perspective behind grand jury secrecy, the Court revived the forgotten notion that the secret grand jury process was created to protect the individual from unfair and unfounded accusations. Justice Brennan also recognized the grand jury's broad investigatory powers (without which it would be unable to decide whether to indict) as well as its need for secrecy to gather the information necessary to determine whether probable cause existed to indict.
The majority then analyzed the legislative history of Rule 6(e) and concluded that the Justice Department's own representative, as well as the Advisory Committee's notes, demonstrated that Congress had never intended disclosure for civil purposes and that Congress would have to make clear its intention to bypass the important rule of secrecy.
Examining the limited policy reasons for granting government attorneys access to grand jury materials, Justice Brennan questioned the wisdom of giving access at all, even to prosecutors. However, he recognized that a modern grand jury would be severely limited without the assistance of an attorney for the government to present evidence and explain the law; moreover, the prosecutor would have difficulty determining whether to prosecute a case if not informed of the evidence going before the grand jury. Nevertheless, Justice Brennan saw no similar policy reasons for extending disclosure to government civil attorneys. In fact, he noted several reasons to preclude civil attorneys from gaining access to grand jury materials.
First, disclosure increased the number of people having information and thus inherently increased the risk of illegal leaks. Second, disclosure posed a threat to the functioning of the grand jury by raising the possibility an attorney would use a witness's statements against the witness in a later civil forum. Third, disclosure threatened the integrity of the grand jury itself: if prosecutors knew that grand jury information might be helpful to their civil colleagues, they would be tempted to elicit evidence for that purpose. Such misconduct not only would subvert the grand jury process, but also would be difficult to prove if it did occur. Fourth, Justice Brennan found that use of grand jury material for civil purposes would subvert the civil discovery process as well. Discussing this fourth reason, he explained:
To allow these agencies to circumvent their usual methods of discovery would not only subvert the limitations and procedural requirements built into those methods, but would grant to the Government a virtual ex parte form of discovery, from which its civil litigation opponents are excluded unless they make a strong showing of particularized need.Implicit in this analysis is Justice Brennan's recognition of the fundamental fairness issues presented by the discovery proceedings attacked in Sells. Thus, the Court determined that use of the grand jury process to aid agency civil lawsuits must not undermine grand jury secrecy.
Observing that the primary interest of the government civil attorney was to save time and expense through access to the grand jury investigation, Justice Brennan stated that "[w]e have consistently rejected the argument that such savings can justify a breach of grand jury secrecy." Consequently, the Court held that government civil attorneys must obtain a court order to obtain disclosure of grand jury materials for civil use.
The Sells Court based much of its decision on its apparent acceptance of the Ninth Circuit's premise that automatic disclosure encouraged abuse of the grand jury process. Interestingly, the Department of Justice argued that denial of automatic disclosure to civil attorneys exacerbated the potential for grand jury abuse because Rule 6(e) did not preclude assigning responsibility for both criminal and civil liability to a single attorney. Strict enforcement against disclosure, it contended, would therefore "foster grand jury abuse by encouraging such dual assignments." The Supreme Court left that argument unanswered.
After concluding that a court order was necessary for disclosure, the Court then addressed the standard of need the government had to meet. Finding that the government attorneys must show the same particularized compelling need as private litigants, the Court indicated that the balancing test could take into consideration the "public interest" in disclosure to the government, as well as any alternative discovery tools available to obtain such information.2 Thus, Sells, relying upon the importance of grand jury secrecy, foreclosed automatic disclosure of grand jury materials to government attorneys for use in civil proceedings. The Sells balancing test, which takes alternative discovery devices into consideration, comes close to the test this author advocates; unlike the method proposed in Maryland & Virginia Milk Producers Ass'n, however, the Sells test fails to set forth a workable method for weighing these interests. Further, one primary distinction between Sells and the proposed test is that Maryland & Virginia Milk Producers Ass'n precludes disclosure for civil purposes of information that government attorneys could not obtain through the government's civil investigative devices. This would ensure that evidence obtainable through use of the grand jury's extraordinarily broad powers but not through civil discovery—such as immunized, self-incriminating testimony—would never form the basis of a civil lawsuit.
Having decided in Sells that disclosure to the Civil Division of the Department of Justice required a court order, the Supreme Court turned to interpreting Rule 6(e) as it applied to federal administrative agencies. United States v. Baggot involved a large-scale investigation into possible criminal violations of the Commodities Exchange Act and the Internal Revenue Code. The investigation spanned two grand jury terms and targeted James Baggot. As a result of plea negotiations, Baggot was not indicted but pled guilty to two misdemeanor violations of the Commodities Exchange Act. Part of the plea bargain required Baggot to read to the grand jury a government-prepared statement based upon his confession during the plea negotiations. The Department of Justice then filed a motion for disclosure of the grand jury transcripts to the Internal Revenue Service for use in a tax audit against Baggot.
The government contended that the historical precedent of disclosing grand jury material to the IRS justified its continuation, arguing that the 1977 legislative history showed congressional awareness of the practice. The Baggot Court faced the same issues that arose in Doe v. Rosenberry. The threshold question was thus "whether the IRS's civil tax audit is 'preliminar[y] to or in connection with a judicial proceeding' under (C)(i)." The Court concluded that it was not.
Writing again for the majority in this long-awaited and definitive ruling, Justice Brennan stated that the language of Rule 6(e)(3)(C)(i) "contemplate[d] only uses related fairly directly to some identifiable litigation, pending or anticipated," stressing that the focus of this exception was on the actual use to be made of the requested materials. The Court found that this language reflected "a judgment that not every beneficial purpose, or even every valid governmental purpose, is an appropriate reason for breaching grand jury secrecy." The Court also noted that because the IRS's tax assessments were self-executing, no necessity existed for a judicial proceeding. Allowing disclosure in this circumstance, where the primary use of the grand jury materials was for an extrajudicial proceeding, would have abrogated the rule. While the Court's decision left unanswered many questions regarding administrative agency access, and apparently was confined to consideration of IRS procedures, it effectively closed the door on agency use of grand jury materials for purely administrative purposes.
As a result of Baggot and Sells, government attorneys who sought access to grand jury materials for civil or administrative use clearly would have to obtain them through a court order. Although these cases provided a prophylactic bright-line rule that protected the individual against government abuse, they did so at the expense of government efficiency. Controversy over these rulings arose immediately.
In 1985, the Supreme Court again strengthened the secrecy language of Rule 6(e) by requiring attorneys for the government to certify to the supervising court that they had expressly advised persons obtaining automatic access to grand jury information under subsection (A)(ii) of their obligation to keep grand jury information secret. In addition to this amendment, Rule 6(e) was at the same time expanded to permit disclosure of information to enhance state criminal prosecutions. This expansion of Rule 6(e) to aid state prosecutions marked the beginning of an executive branch effort to dilute the protective role of the grand jury.
The Department of Justice acknowledged the limitations placed upon their civil investigatory process by Sells and Baggot. The current Department of Justice Manual, citing Sells, clearly instructs that "[d]isclosure to government attorneys and their assistants for use in a civil suit is permissible only with a court order under Rule 6(e)(3)(C)(i)." The Manual further concedes that "it is clear that Rule 6(e) does not authorize disclosure to attorneys for other federal government agencies." The Manual outlines the procedure and standard by which a federal agency may obtain grand jury materials, explaining that "[a] failure to demonstrate sufficient need can result in the denial of a request for otherwise permissible disclosure." While the Department of Justice outwardly indicated its reluctant compliance with the mandates of Sells and Baggot, the Manual also clearly enunciates the Department's "position that the particularized need requirement is inapplicable when grand jury materials are sought for federal law enforcement purposes."
Notwithstanding the certification and state enhancement amendments, a congressional stalemate developed between members who favored strengthening the enforcement/investigative role of the grand jury and those who favored strengthening its protective/investigative role. This clash was epitomized by two diametrically opposed grand jury measures introduced in 1985.
From May 1985 until August 1986, hearings were held in the House of Representatives on Representative John Conyer's Model Grand Jury Act. The purpose of the proposed Act was to inject comprehensive due process safeguards into grand jury proceedings and insure their protective role. The proposal died in committee and was the last major effort by Congress at federal grand jury reform.
The first major legislative effort to undermine the protective role of Rule 6(e) began soon thereafter. On September 18, 1985, Representative George Gekas introduced House Bill 3340, the Grand Jury Disclosure Amendments Act. Two days later, Senator Strom Thurmond introduced virtually the same bill as part of the Reagan Administration's legislative initiative aimed at fraud in government procurement. The Department of Justice initiated the Grand Jury Disclosure Amendments Act to overcome the "impediments" created by Sells and Baggot. The proposed legislation also purported to answer the question left open in Sells by permitting the same federal prosecutor to use grand jury materials in a companion civil case. During the congressional debate over these proposed amendments the Supreme Court granted certiorari in United States v. John Doe, Inc.
United States v. John Doe, Inc. was a case in which the Department of Justice convened a grand jury as part of a criminal antitrust investigation against several American corporations for price-fixing in tallow sales to foreign countries. Although the targeted corporation challenged jurisdiction under the Sherman Act, the grand jury investigation continued for two years, after which time the Department of Justice "tentatively concluded" that the companies had violated the Sherman Act but that it would not seek indictments. After the grand jury's dismissal, the Department of Justice immediately began civil proceedings with the same attorneys who had conducted the criminal investigation. The attorneys issued to the companies Civil Investigative Demands that were "essentially copies of earlier grand jury subpoenas." Two of the companies refused to comply with the Civil Investigative Demands. As a result of the civil investigation, the Antitrust Division of the Justice Department concluded that the companies had violated the Sherman Act and possibly the False Claims Act as well. The Antitrust Division attorneys then requested and received a Rule 6(e) order allowing disclosure of grand jury materials for consultation with the Justice Department's Civil Division attorneys. The "John Doe" corporation moved to vacate the order and requested that the government be enjoined from using grand jury materials in the civil suit. The government attorneys admitted using grand jury materials to prepare for the civil action. The Second Circuit held that the Justice Department's Criminal Division attorneys could not continue to use grand jury materials in the subsequent civil proceeding.
The Supreme Court granted certiorari to answer the question left open in Sells: whether government attorneys who conducted a criminal investigation could continue to use grand jury material for preparation of a civil suit. The second issue on appeal was whether disclosure could be made to the Justice Department's Civil Division attorney's for consultation on the False Claims Act suit. Consequently, the case also presented an opportunity for the Court to apply the "particularized need" test to a request by the government for disclosure.
Addressing the first issue, the Court focused on "the plain meaning" of the term "disclosure" under Rule 6(e) and determined that no "disclosure" occurred where an attorney, who legitimately obtained information from a grand jury, reviewed that information in preparing a civil suit. However, the Court specifically narrowed this ruling to allow only "refamiliariz[ation]" of grand jury material by the attorney who conducted the grand jury proceeding. The Court forbade any use of the materials in the pleadings or proceeding that might disclose the information to any other parties. Although its holding on this issue was narrowly drawn to allow only refamiliarization, the Court, in taking this "plain meaning" approach, ignored the Sells analysis of potential grand jury abuse and concerns of fundamental fairness of process.
Turning to the second issue, and confirming that the government was subject to the "particularized need" test as first set forth in Procter & Gamble, the Court concluded that the test could be more easily met by the government than a private party. Balancing "the public benefits of the disclosure" against "the dangers created by the limited disclosure requested," the Court identified a public interest in the efficient, effective, and evenhanded enforcement of federal statutes, and focused primarily on avoidance of the costs and delays involved in duplicating grand jury investigations. Balanced against those interests were the concerns of fair process expressed in Sells.4 The Doe Court concluded that the benefit of avoiding the cost and delay of reproducing grand jury material outweighed the interests in grand jury secrecy, and granted disclosure to the Civil Division attorneys.
The Doe Court's reliance upon the law enforcement interest undercut the holding of Sells. It also partially achieved the Department of Justice's goal of overcoming the protective "impediments" of Sells. Justice Brennan, dissenting in Doe, criticized the majority by observing that the focus in Sells was on the "actual use" of grand jury information. The Doe Court, focusing on who accessed the information rather than the purpose of such access, bypassed the very real concerns of grand jury abuse and fundamental fairness of process raised in Sells, as well as the Department of Justice's own admission that the practice of granting dual assignments to one attorney would "foster" such abuse. Further, Doe ignored the Sells Court's concern that abuse, if it occurred, would be virtually impossible to show, particularly where the defendant may be unable to obtain the grand jury transcripts necessary to prove abuse. This unfairness demonstrates the reality that individuals caught in the Doe vice cannot adequately test the merits of the government's theory of liability. In fact, as early as Procter & Gamble, litigants recognized that civil enforcement interests might subvert the grand jury into a civil discovery tool. Moreover, in Sells, Justice Brennan recognized that the exercise of the grand jury's extraordinary powers solely for civil investigations gave an unfair advantage to the government as a civil plaintiff and left the defendant with an extremely difficult case to defend. Consequently, Doe gave the Department of Justice access to grand jury information through the backdoor in a manner clearly prohibited by the Court's prior ruling in Sells.
Perhaps more damaging to the Sells notion of fairness in the civil arena is the Doe Court's conclusion that cost and delay may be sufficient to prove "particularized need" for government access. Procter & Gamble explicitly rejected this justification when a civil defendant sought access to prepare for trial against the government, while Sells rejected cost and delay as a sole justification for government access. As a result of this retreat from Sells, information that may be critical for trial preparation can be granted to the government but denied to the defendant. This imbalance goes directly against the purpose behind the Federal Rules of Civil Procedure and the concept of fundamental fairness. At a time when civil sanctions can be as punishing, if not more so, than some criminal penalties, one must question whether issues of cost and delay alone should outweigh the interests in a fair trial process.
This Article's proposed solution, the Maryland & Virginia Milk Producers Ass'n procedure, would take into consideration the cost and delay to the government of duplicating grand jury investigations for a subsequent civil action. Unlike the Doe decision, however, the procedure would require a showing by the government prior to disclosure that it could have obtained the materials through civil investigatory devices. Further, the defendant would receive notice of the potential disclosure, which would enable him or her to challenge the disclosure and raise the issue of grand jury abuse. This process eliminates duplication of investigations to the extent that civil attorneys could have obtained the material, while also eliminating disclosure of those materials that the civil attorneys could not have obtained. Unlike the Doe solution, the method provides no incentive to misuse the grand jury process because civil attorneys will gain no information they could not have gained through their own civil investigatory devices. Also, because materials sought from the grand jury become exposed to the defendant at the disclosure hearing and prior to filing of the civil complaint, the Maryland & Virginia Milk Producers Ass'n solution provides more incentive for the government to utilize civil investigatory tools. Further, because the materials are obtainable through civil discovery, the defendant will always gain reciprocal access to fully prepare for trial. The solution would eliminate the imbalance of discovery Doe and Procter & Gamble engendered.
Congress never passed the Reagan Administration bills that were proposed in 1985 to overcome the "impediments" of Sells and Baggot. They did not disappear, however, and surfaced again in a new form in the Senate version of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). Section 918 of the Senate version included language virtually identical to that proposed in the Grand Jury Disclosure Amendments Act of 1985. When the House and Senate joined in conference, however, they discarded section 918. What survived was an amendment authorizing automatic disclosure of grand jury information concerning a banking law violation to the Resolution Trust Corporation attorney responsible for investigating such violations. The decision to grant automatic access is now in the discretion of the Department of Justice attorney handling the grand jury investigation. Additionally, the FIRREA amendment reduced the Rule 6(e) standard for court-ordered disclosure of banking law violations from "particularized need" to "substantial need" in situations where the Department of Justice declines to grant automatic disclosure. This provision, which runs afoul of Rule 6(e) as interpreted by Sells and Baggot, has not yet been tested in the courts.
The Bush Administration also attempted to get specific disclosure for securities law violations by seeking to include a disclosure provision in The Securities Law Enforcement Act of 1990. The disclosure provision was made a part of the Senate version of the bill but the House did not approve it. In 1994, both the House and the Senate drafted health insurance acts that included FIRREA-like amendments. At the close of 1995, a FIRREA-like amendment to fight fraudulent Medicare practices was included in the Medicare Preservation Act of 1995. Perhaps the most subversive legislative exception to Rule 6(e) secrecy is the International Antitrust Enforcement Assistance Act of 1994 (IAEAA). President Clinton signed the IAEAA into law on November 2, 1994. This remarkable act, which represents a radical departure from the accepted practice of legislative drafting, penetrates the grand jury secrecy protections of Rule 6(e) by expanding the definition of a "state" under 6(e)(3(C)(iv) to include foreign countries, and by defining a "state criminal law" as "a foreign antitrust law" and "an appropriate official" as "a foreign antitrust authority." Given the proliferation of legislation granting specific rights of automatic disclosure for federal agencies' civil use, it seems clear that such legislation is also circumventing the "impediments" and teachings of Baggot.
In his recent article, Professor Graham Hughes questioned whether FIRREA might be the "crack that will eventually cause the collapse of the whole dam" in grand jury secrecy. In light of the recent legislation incorporating disclosure clauses, the answer, unfortunately, appears to be yes. While the legislative provisions have not been constitutionally tested, efforts to enact greater executive branch use of the grand jury process for civil purposes apparently will continue, although not all of them have met with success. The movement toward the erosion of Rule 6(e) hopefully will yield to a more reasoned analysis along the lines of the proposal in Maryland & Virginia Milk Producers Ass'n, which would preserve to the greatest extent possible the historical importance of grand jury secrecy.
This Article envisions the use in parallel criminal and civil regulatory investigations of a process that would eliminate the all-or-nothing approach of prior court decisions. This process reaches a compromise between the competing interests of government efficiency and the need to protect individuals from an overreaching executive branch.
If the Procter & Gamble Court had applied the Maryland & Virginia Milk Producers Ass'n procedure, it would have eliminated nine years of litigation. Government prosecutors would have been required to notify Procter & Gamble of their intent to disclose grand jury materials to civil attorneys. Having notice, Procter & Gamble would then have had the opportunity to challenge the disclosure at a hearing, where prosecutors would have borne the burden of proving to the court that all information to be disclosed would be discoverable to the government civil attorneys through civil investigative devices. At this hearing, Procter & Gamble would have been given the opportunity to challenge that proof, just as they would have if the government had used civil investigatory devices. All materials the court deemed subject to disclosure at the hearing would likewise have been discoverable to Procter & Gamble under the Federal Rules of Civil Procedure once the complaint was filed. Materials the court found were not subject to disclosure at the hearing could not have been used in the subsequent civil proceeding. Any information the government gained without the aid of the grand jury would not have been exposed prior to filing of the complaint. This process would save the cost of duplicate investigations while eliminating the temptation to use the grand jury process as a civil discovery device and would maintain the balance of civil discovery.
Further, the D.C. Circuit's solution would result in a more expeditious determination of civil actions. If both parties knew from the case's inception that evidence is nondiscoverable through either grand jury access or civil investigatory devices, they would be able to gauge the probable trial outcome. Thus, this process would achieve the goals of the Federal Rules of Civil Procedure and further law enforcement objectives without sacrificing the integrity of the grand jury system.
"The history of American freedom is, in no small measure, the history of procedure." The Grand Jury Clause of the Fifth Amendment protects individuals against oppression by the government. The procedural rule governing grand jury secrecy is a substantial part of that protection, yet it has been the subject of extensive litigation where parallel civil and criminal government investigations threaten to compromise that secrecy. When the government seeks to penetrate secrecy to aid civil regulatory actions, courts should balance the interests advanced by the parties against the standard of fairness implicit in constitutional due process. Courts must balance consideration of the costs and delay in compelling the government to duplicate grand jury investigations in parallel or subsequent civil actions against the civil defendant's concern for the secrecy of grand jury proceedings. Use of the grand jury's extraordinary powers will give prosecutors incredible pretrial and trial advantages over future civil targets, especially where those powers are otherwise unavailable through authorized civil discovery tools.
While cost-effective civil law enforcement is a crucial issue in this era of alarming governmental deficits, coalescing the civil and criminal processes in the manner recommended by Professor Hughes is not the most equitable alternative in terms of fair process to the individual. Our justice system has survived on principles that preserve individual civil liberties and due process. From the perspective of those who founded a country by revolution against an overreaching and tyrannical government, arguing for efficiency at the cost of fair process is equivalent to advocating a return to the monarchy.
Application of Federal Rule of Criminal Procedure 6(e) must balance the need for enforcing laws against the necessity of safeguarding fundamental rights. Maryland & Virginia Milk Producers Ass'n presented a common-sense solution to the issue of grand jury secrecy in the environment of parallel proceedings. On this fiftieth anniversary of the Federal Rules of Criminal Procedure, the Supreme Court and Congress should revisit the issue and decisively establish this equitable principle as an amendment to Rule 6(e). The following would modify Rule 6(e)(C)(i) in an appropriate manner:
(C) Disclosure otherwise prohibited by this rule of matters occurring before the grand jury may also be made—
(i) when so directed by a court preliminary to or in connection with a judicial proceeding upon the following showing:
(a) In civil regulatory proceedings involving the government, the government must prove grand jury matters sought to be used by the government in the civil proceeding would be obtainable through civil investigatory devices. Where the government obtains disclosure under such showing, the private opponent may discover these grand jury materials under the Federal Rules of Civil Procedure.
(b) Where the government seeks disclosure of grand jury materials for use in a civil proceeding pursuant to subsection (a), notice must be given to the opponent and an adversarial hearing open only to the prosecutor and potential civil defendant and counsel must be conducted prior to disclosure.
(c) In civil proceedings involving private parties, compelling particularized need for grand jury matter must be shown although the material may be discoverable under the Federal Rules of Civil Procedure.
(d) Disclosure determinations for private litigants pursuant to subsection (c) may be ex parte.
During the grand jury proceedings which preceded these criminal cases, the United States obtained and copied thousands of documents from the files of the Maryland and Virginia Milk Producers Association. After the cases had terminated favorably to the Association, the Government returned to it the original documents but refused to return the copies, claiming them as its own property and saying it will or possibly may rely upon some of them in the trial of a civil action now pending in the United States District Court for the District of Columbia.
The Association moved the District Court to require the return of the copies. The motion was denied, the trial judge holding that, as the documents could be reached by the Government through discovery process in the civil action, it would be vain to order the copies delivered to the Association. This appeal is from the denial of the motion.
We hold the United States may retain the copies of the documents in question, subject to the following limitations:
1. That it may use in the trial of the pending civil action only such of the documents, of which it has retained copies, as it could obtain through discovery processes applicable to civil actions, and only such as are enumerated by it as those upon which it will or possibly may rely, in a list to be served upon the Association on or before March 1, 1958, and in no event less than 60 days prior to the commencement of such trial;
2. That the United States may use in the trial of any future civil action against the Association only such of the documents, of which it has retained copies, as it could obtain through discovery processes available to civil actions and only such as are enumerated by it as those upon which it will or possibly may rely, in a list to served upon the Association not less than 60 days prior to the commencement of the trial of any such future civil action;
3. That in the lists the documents intended to be relied upon shall be described and referred to by the identification numbers placed thereon by the Association at the time of their submission.
The order appealed from should be modified to include the foregoing provisions.