Source: http://openjurist.org/584/f2d/1366
Timestamp: 2016-05-05 11:20:10
Document Index: 258658586

Matched Legal Cases: ['§ 515', '§ 1291', '§ 1291', '§ 1292', '§ 1291', '§ 1292', '§ 1292', '§ 1292', '§ 1291', '§ 1292', '§ 1291', '§ 1291', '§ 1291', '§ 1291', '§ 1651', '§ 7401', '§ 7201', '§ 515', '§ 1292', '§ 1292', '§ 332', '§ 331', '§ 1291', '§ 1292', '§ 1651', '§ 1291', '§ 1292', '§ 1291', '§ 1292', '§ 1292', '§ 1292', '§ 3929', '§ 1291', '§ 1291', '§ 1291', '§ 2283', '§ 46', '§ 1361', '§ 1651', '§ 1292', '§ 1292', '§ 1291', '§ 1292', '§ 1651']

584 F2d 1366 April Grand Jury Subpoenas General Motors Corporation v. United States | OpenJurist
584 F. 2d 1366 - April Grand Jury Subpoenas General Motors Corporation v. United States HomeFederal Reporter, Second Series 584 F.2d.
584 F2d 1366 April Grand Jury Subpoenas General Motors Corporation v. United States 584 F.2d 1366
78-2 USTC P 9692
In re APRIL 1977 GRAND JURY SUBPOENAS.GENERAL MOTORS CORPORATION, Appellant,v.UNITED STATES of America, Appellee.
Argued June 13, 1978.Decided Sept. 7, 1978.
George J. Moscarino, Hugh Calkins, Jones, Day Reavis & Pogue, Robert C. Kahrl, Cleveland, Ohio, Julius L. Russu, Otis M. Smith, General Motors Corp., Detroit, Mich., for appellant.
James K. Robinson, U. S. Atty., Detroit, Mich., Willard C. McBride, M. Carr Ferguson, Asst. Atty. Gen., Ernest J. Brown, Robert E. Lindsay, Charles E. Brookhart, James A. Bruton, Tax Div., Dept. of Justice, Washington, D. C., for appellee.
Before PHILLIPS, Chief Judge, WEICK, EDWARDS, CELEBREZZE, LIVELY, ENGEL and MERRITT, Circuit Judges, and PECK, Senior Circuit Judge.*
Finding that the Attorney General's action is specifically authorized by statute, 28 U.S.C. §§ 515, 543 (1970), the District Judge overruled General Motors' motion to disqualify but certified the issue to us under the Interlocutory Appeals Act of 1958, as a "controlling question" apparently on the ground that, if the District Court's ruling were later found to be erroneous, he presence of an IRS lawyer in the grand jury room might void any indictment returned by the grand jury against General Motors or its officials. General Motors pursued its appeal to this Court under the Interlocutory Appeals Act, and it also appealed under 28 U.S.C. § 1291 (1970), treating the order as a "final decision" for the purposes of review.
The government then moved to dismiss both appeals, the § 1291 appeal on the grounds that the lower court order overruling General Motors' motion to disqualify was interlocutory and not final, and the § 1292(b) interlocutory appeal on the grounds that such piecemeal appeals are not allowed in criminal cases. Without oral argument or conference consideration, an administrative panel of this Court, consisting of Judges Weick, Edwards and Celebrezze, entered an order on October 3, 1977, dismissing General Motors' § 1291 appeal (No. 77-1508) but granting General Motors leave to proceed under § 1292(b). A different panel of this Court, consisting of Judges Weick, Celebrezze and Merritt, then heard the § 1292(b) appeal on the merits and filed an opinion dated April 5, 1978, reported at 573 F.2d 936, holding that this court has appellate jurisdiction and that the IRS lawyer should be barred from the grand jury proceedings. Judge Merritt dissented. On motion by the government, we vacated the panel opinion and ordered rehearing En banc under Rule 35 of the Federal Rules of Appellate Procedure and the Rules of this Court.1
The District Court's order is not reviewable under the Interlocutory Appeals Act of 1958.2 The Act authorizes an appeal from an interim or non-final decision "in a civil action" upon a certification by the District Judge that his decision raises a "controlling question of law as to which there is substantial ground for difference of opinion," and that resolution of the issue "may materially advance the ultimate termination of the litigation." The statute in question establishes the right of interlocutory appeal in Civil Cases, but it extinguishes that right in Criminal cases and in other matters which may not be properly characterized as "civil actions." From a simple reading of the statute itself, it seems self-evident that a grand jury investigation of possible criminal tax violations should not be characterized as a "civil action" under § 1292(b) and that we lack jurisdiction under the Interlocutory Appeals Act.
This conclusion is based not simply on a mechanical application of the terms "civil" or "criminal" to the proceedings below but rests also on an established line of precedent disapproving appellate interruption of the grand jury's investigation. In Cobbledick v. United States, 309 U.S. 323, 60 S.Ct. 540, 84 L.Ed. 783 (1940), the Supreme Court held that a district court's refusal to quash a grand jury subpoena was not appealable as a final order under § 1291. In an opinion suggesting that a grand jury proceeding is part of the criminal process, Justice Frankfurter, writing for the Court, recognized the historic principle of judicial administration "forbidding piecemeal disposition" and "separate review of the component elements" of criminal cases. 309 U.S. at 325, 60 S.Ct. at 541. The principle is designed to conserve judicial time and prevent delaying tactics in criminal proceedings. Justice Frankfurter pointed out that the fifth amendment makes the grand jury a necessary part of the criminal process and explained that "(i)t is no less important to safeguard against undue interruption the inquiry instituted by a grand jury than to protect from delay the progress of the trial after an indictment has been found." Id. at 327, 60 S.Ct. at 542.
(W)e have consistently held that the necessity for expedition in the administration of the criminal law justifies putting one who seeks to resist the production of desired information to a choice between compliance with a trial court's order to produce prior to any review of that order, and resistance to that order with the concomitant possibility of an adjudication of contempt if his claims are rejected on appeal. 402 U.S. at 532-33, 91 S.Ct. at 1582.
Even if this appeal could be characterized as an appeal in a "civil action" within the meaning of § 1292(b), we would exercise our statutory discretion by dismissing this appeal since we do not believe that resolution of this issue at this time would "materially advance the ultimate termination of the litigation." The legislative history of the Interlocutory Appeals Act suggests that interlocutory appeals, even in civil cases, should be "sparingly granted."3 To allow an appeal when the District Court has refused to disqualify a government lawyer from a grand jury investigation simply disrupts the investigation and creates the possibility that the target of the inquiry by the threat of delay and protracted legal maneuvering will exert unwarranted influence in the government's choice of its prosecuting attorney.
In the Cobbledick And Ryan cases, discussed above, both of which were brought under § 1291, the Supreme Court held that District Court orders controlling the issuance of grand jury subpoenas are not final decisions for the purposes of appeal. For the reasons we have already set forth, we believe that the holding and the principles applied in these two cases preclude General Motors' appeal under § 1291 here. We note also that the Supreme Court recently reaffirmed these principles in Coopers & Lybrand v. Livesay, --- U.S. ----, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978), holding that a district court's determination that a lawsuit may not be maintained as a class action is not appealable as a final decision under § 1291. The Court based its decision in part on the factors of "potential waste" and delay discussed in the Cobbledick Decision, and quoted approvingly the following excerpt from Justice Frankfurter's opinion in Cobbledick :
The Supreme Court repeated the principle disfavoring interlocutory appeals in criminal cases under § 1291 in another decision last term, United States v. MacDonald, 435 U.S. 850, 98 S.Ct. 1547, 56 L.Ed.2d 18 (1978). In a unanimous opinion, the Court held that a criminal defendant may not appeal, before trial, an order denying his motion to dismiss on speedy trial grounds. Again quoting language from the Cobbledick opinion, the Court observed that "the rule of finality has particular force in criminal prosecutions because 'encouragement of delay is fatal to the vindication of the criminal law.' " Id. at 1549, Quoting 309 U.S. at 325, 60 S.Ct. 540. The Court noted that it had deviated from this settled principle in a limited category of criminal cases, such as bail review and double jeopardy cases, which "involve an asserted right the legal and practical value of which would be destroyed if it were not vindicated before trial." 98 S.Ct. at 1552.
EDWARDS, Circuit Judge, with whom LIVELY, Circuit Judge, joins, concurring. I join Judge Merritt's opinion dismissing this appeal.
I feel, however, that if in fact a prosecutorial conflict of interest constituting abuse of the grand jury process were shown in the record below, this court could properly consider the case under the all writs statute, 28 U.S.C. § 1651 (1970), as a petition for writ of mandamus. See Schlagenhauf v. Holder, 379 U.S. 104, 109-12, 85 S.Ct. 234, 13 L.Ed.2d 152 (1964); LaBuy v. Howes Leather Co., 352 U.S. 249, 259-60, 77 S.Ct. 309, 1 L.Ed.2d 290 (1957); United States v. United States District Court, 407 U.S. 297, 301 n. 3, 92 S.Ct. 2125, 32 L.Ed.2d 752 (1972); Comment, The Appealability of Orders Denying Motions for Disqualification of Counsel in the Federal Courts, 45 U.Chi.L.Rev. 450, 476-80 (1978). See also Will v. Calvert Fire Ins. Co., --- U.S. ----, 98 S.Ct. 2552, 57 L.Ed.2d 504 (1978). Thus, I not only join the opinion of the court in dismissing the appeal, but also consider and reject mandamus as inappropriate on the facts shown in this record.
The interest of the United States in collection of income taxes is represented both by statutorily authorized civil tax collection proceedings, See 26 U.S.C. §§ 7401-7408 (1976) and (in appropriate cases) criminal fraud prosecutions, See id. §§ 7201-7216. These functions are not in conflict and, on the contrary, the latter supplements the former. In a very recent case this principle has been recognized by the Supreme Court. United States v. LaSalle National Bank, --- U.S. ----, ---- - ---- n. 12, 98 S.Ct. 2357, 57 L.Ed.2d 221 (1978). On this point the LaSalle Court appears to be unanimous. See id. at ---- & n.2, 98 S.Ct. 2369 (Stewart, J., dissenting).
Congress has specifically authorized the appointment by the Attorney General of special assistants to "conduct any kind of legal proceeding, . . . including grand jury proceedings . . . ." 28 U.S.C. § 515 (1970). This statute requires that each such special assistant "shall take the oath required by law" of assistants to the Attorney General. This was done.
Nothing precluding such an appointment is found in the Federal Rules of Criminal Procedure. Rule 6(d) of Fed.R.Crim.P. provides that "attorneys for the government" may be present during grand jury sessions. Rule 54(c) defines attorneys for the government as including "the Attorney General, an authorized assistant of the Attorney General, a United States Attorney, an authorized assistant of a United States Attorney . . . ."
Thus this record shows that Special Assistant United States Attorney General Piliaris has been properly designated to perform his grand jury assignment. There are no findings before this court to indicate that he has done anything except demonstrate a zealous interest in collecting federal taxes for a single client the United States. This clearly has not increased his popularity with the taxpayer, but it does not reflect any lack of legal ethics.
The possible abuse of petitioner General Motors' interests which might arguably develop from the instant investigation can result only if there proves to be no probable cause for grand jury criminal indictment and there is proof that the government in bad faith undertook to employ a grand jury purely for purposes of civil tax investigation. See United States v. Procter & Gamble Co., 356 U.S. 677, 683-84, 78 S.Ct. 983, 2 L.Ed.2d 1077 (1958). Here the District Judge found that there had been no such proof.1 There is nothing to indicate that his finding is clearly erroneous.
Further, the District Judge granted General Motors' motion for a protective order specifically guarding against such abuse.2
I believe that this Court has jurisdiction to hear the appeal pursuant to 28 U.S.C. § 1292(b) and that it should exercise its discretion and do so. The Third Circuit has apparently approved this result, In re Grand Jury Impaneled Jan. 21, 1975, 541 F.2d 373 (3d Cir. 1976); See also In re Grand Jury Investigation, 338 F.Supp. 1379 (W.D.Pa.1972), and the majority cites no cases on point holding to the contrary.
The majority's assertion that this case does not involve a "civil action" squarely contradicts language in both United States v. Neiberger, 460 F.2d 290, 292 (6th Cir. 1972), and United States v. Calandra, 455 F.2d 750, 752-53 (6th Cir. 1972). The majority, curiously, does not mention Neiberger or Calandra, apparently seeking to overrule them Sub silentio.1
The majority's concern with piecemeal appeals in the grand jury context is well founded, but it overreacts to this concern. There are two safeguards built into § 1292(b) which would sift out almost all interlocutory appeals like this one stemming from grand jury proceedings. First, there is the required certification by the district court and, second, there is the discretion given to the court of appeals to decide whether to hear such appeals. These safeguards would protect against interlocutory appeals in the grand jury context, save for the extraordinary case. I believe that this is an extraordinary case and that the prior panel did not act improvidently in exercising its discretion to the appeal.
* A grand jury is an arm of the court and is subject to its supervision and control. Ample power to investigate, to correct, and to put a stop to, grand jury abuse is vested in Judicial Councils, 28 U.S.C. § 332(d), and the Judicial Conference of the United States, 28 U.S.C. § 331. Appellate Courts have power to rule on these abuses on direct appeal, 28 U.S.C. § 1291, on interlocutory appeal, 28 U.S.C. § 1292(b), and under the All Writs Act, 28 U.S.C. § 1651.
It cannot be seriously controverted that many abuses now exist in grand jury functions, which cry out for reform. They are detailed in an article appearing in the American Bar Association Journal, March, 1978, Vol. 64, page 337, a copy of which is appended hereto. The Association has endorsed a comprehensive set of proposals for grand jury reform. Curiously enough, one of the proposed reforms states: "A prosecutor would not be allowed to use the grand jury to assist in an administrative inquiry . . . ." Id. at 338.
In the present case the grand jury is not only Being used to assist in the administrative inquiry, but also the Special Attorney conducting the grand jury investigation is the attorney for, and is on the payroll of, the aggrieved agency, and the one who recommended the grand jury investigation.1
As was true three Terms ago with respect to another sensitive case brought to this court, I can "find no justification for the Court's straining to rid itself of this dispute." DeFunis v. Odegaard, 416 U.S. 312, 349 (94 S.Ct. 1704, 40 L.Ed.2d 164) (1974) (Brennan, J., dissenting). "Although the Court should, of course, avoid unnecessary decisions of constitutional questions, we should not transform principles of avoidance of constitutional decisions into devices for sidestepping resolution of difficult case." Id. at 350 (94 S.Ct. 1704).
MR. McBRIDE: Yes, your Honor, for this reason
MR. McBRIDE: Again for this reason that the law, Section 515 and 543 of Title 28, does not put any limits on the authority of the attorney general. It puts him in control and GM, nor the Court, if I may be forgiven to say, so are not, I think, in a position, and GM should not be able to dictate who it will have conducting this grand jury or to assist in the conduct of this grand jury as it has also been trying to dictate who would be persons to assist the government attorneys and suggesting that we have other people. (A. 261-62)
As we have held, the power of appointment resides in the Attorney General or in his designated assistant. This power of appointment does not authorize the Attorney General, or his associate, to appoint an attorney who has a conflict of interest or an appearance of a conflict, nor does it immunize such an appointment so as to prevent judicial review. The courts have jurisdiction in a proper case to decide whether such conflict or appearance of conflict exists. (573 F.2d at 943)
GM filed in this Court a notice of appeal under 28 U.S.C. § 1291, which was docketed as a direct appeal (No. 77-1508), and a petition for leave to appeal under 28 U.S.C. § 1292(b). The Government filed a motion to dismiss the direct appeal. An administrative panel of this Court, consisting of Judges Weick, Edwards and Celebrezze, granted the Government's motion to dismiss the direct appeal. By the same order that panel allowed interlocutory appeal. It should not be necessary for GM to have two appeals pending here from the same order.2
Calandra also involved an appeal under § 1291 by the Government from an order entered in a grand jury proceeding.3
Even if this appeal could be characterized as an appeal in a "civil action" within the meaning of § 1292(b), we would exercise our statutory discretion by dismissing this appeal since we do not believe that resolution of this issue at this time would "materially advance the ultimate termination of the litigation." The legislative history of the Interlocutory Appeals Act suggests that interlocutory appeals, even in civil cases, should be "sparingly granted." To allow an appeal when the District Court has refused to disqualify a government lawyer from a grand jury investigation simply disrupts the investigation and creates the possibility that the target of the inquiry by the threat of delay and protracted legal maneuvering will exert unwarranted influence in the government's choice of its prosecuting attorney.
The key consideration is not whether the order involves the exercise of discretion, but whether it truly implicates the policies favoring interlocutory appeal. The determination of what orders are properly reviewable under § 1292(b) must be made by a practical application of those policies, not by a mechanical application of labels such as "discretionary" or "nondiscretionary." Those policies, both before and since the enactment of § 1292(b) have included the avoidance of harm to a party pendente lite from a possibly erroneous interlocutory order and the avoidance of possibly wasted trial time and litigation expense. In this case, as subsequent discussion will disclose, there exists by virtue of the order appealed from both the possibility of prejudice to a party pendente lite and the possibility of considerable avoidable wasted trial time and litigation expense.
It has not been the practice of this Court to treat orders allowing appeals made by Administrative Panels in the manner which was inflicted on GM in the present case. In Cardwell v. Chesapeake & Ohio Ry. Co., 504 F.2d 444 (6th Cir. 1974), this Court in an opinion written by Circuit Judge McCree decided the merits of an interlocutory appeal in a F.E.L.A. suit for damages after an Administrative Panel of this Court had allowed the appeal. Judge McCree pointed out, however, for the benefit of District Courts and litigants that this particular use should not be made of the statute. Caldwell was cited in 16 Wright-Miller-Cooper-Gressman Federal Practice and Procedure § 3929, at 142 (1977) and the authors state:
(footnote:)
Although the case was of the sort that should not give rise to an interlocutory appeal, and one judge had dissented from the grant of permission to appeal, "(n)evertheless, we have permitted the appeal, and to expedite the ultimate conclusion of this litigation, we consider the issue presented." Caldwell v. Chesapeake & O. Ry., C.A. 6th, 1974, 504 F.2d 444, 447.
The fairness asserted by the majority in its even considering now GM's appeal under § 1291 and then denying it, relying on inapposite authorities, obviously was of no help to GM. All Courts are required to treat litigants fairly. Neither of the two cases cited by the majority as authority for again dismissing GM's direct appeal involved final orders. Cobbledick v. United States, 309 U.S. 323, 60 S.Ct. 540, 84 L.Ed. 783 (1940), involved only an order of the District Court denying a motion to quash a grand jury subpoena, which clearly was not a final order. United States v. Ryan, 402 U.S. 530, 91 S.Ct. 1580, 29 L.Ed.2d 85 (1971), likewise involved an order (not final) of the District Court denying a motion to quash a grand jury subpoena duces tecum.4
Coopers & Lybrand v. Livesay, --- U.S. ----, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978), is inapposite as its holding was that denial of only the class action aspects of a case was not appealable as it is not a final order.
The decision of the majority in dismissing GM's direct appeal on the ground that the order appealed from is not a final order, conflicts with a recent decision of our Court in Melamed v. ITT Continental Baking Co., 534 F.2d 82, 84 (6th Cir. 1976), before Judges Peck, Miller and McAllister, stating:5
Initially, we are confronted with the issue of whether the district court's order denying Continental's motion for disqualification of Winston & Strawn is appealable at this stage of the proceedings as a final decision of the district court pursuant to 28 U.S.C. § 1291. While this precise issue has not previously been before this Court, other circuits considering the question have generally concluded that an order denying a motion for disqualification is appealable under 28 U.S.C. § 1291. Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp., 496 F.2d 800 (2d Cir. 1974) (en banc) (cases cited); see Kroungold v. Triester, 521 F.2d 763 (3d Cir. 1975); Fullmer v. Harper, 517 F.2d 20 (10th Cir. 1975); Yablonski v. United Mine Workers, 147 U.S.App.D.C. 193, 454 F.2d 1036 (1971) (dicta), Cert. denied, 406 U.S. 906, 92 S.Ct. 1609, 31 L.Ed.2d 816 (1972); Uniweld Products, Inc. v. Union Carbide Corp., 385 F.2d 992 (5th Cir. 1967), Cert. denied, 390 U.S. 921, 88 S.Ct. 853, 19 L.Ed.2d 980 (1968). Contra, Cord v. Smith, 338 F.2d 516 (9th Cir. 1964).
Accord, Cleveland v. Cleveland Elec. Illuminating Co., 440 F.Supp. 193 (N.D.Ohio 1976), Aff'd, 573 F.2d 1310 (6th Cir. 1977).
In the context of a trial rather than a grand jury proceeding, it has been held that an order Granting a motion to disqualify counsel is a final judgment under the collateral order doctrine of Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). E. g., Hull v. Celanese Corp., 513 F.2d 568, 570-71 (2d Cir. 1975); Draganescu v. First Nat'l Bank, 502 F.2d 550, 551 (5th Cir. 1974); Richardson v. Hamilton Int'l Corp., 469 F.2d 1382, 1383 n. 1 (3d Cir. 1972), Cert. denied, 411 U.S. 986, 93 S.Ct. 2271, 36 L.Ed.2d 964 (1973); United States v. Hankish, 462 F.2d 316, 318 (4th Cir. 1972) (dictum); Brown v. Miller, 52 U.S.App.D.C. 330, 286 F. 994 (1923) (attorney himself appeals; jurisdiction assumed without discussion). In fact, although there was originally some authority for the view that orders denying a motion for disqualification were not appealable under Cohen, e. g., Fleischer v. Phillips, 264 F.2d 515, 516-17 (2d Cir.), Cert. denied sub nom., Fleischer v. Benjamin, 359 U.S. 1002, 79 S.Ct. 1139, 3 L.Ed.2d 1030 (1959); Marco v. Dulles, 268 F.2d 192, 193 (2d Cir. 1959), the weight of recent authority is definitely in the direction of treating the denial of such motions as final orders, E. g., Yablonski v. UMW, 147 U.S.App.D.C. 193, 454 F.2d 1036, 1038 & n. 9 (1971), Cert. denied, 406 U.S. 906, 92 S.Ct. 1609, 31 L.Ed.2d 816 (1972) (order denying motion for disqualification appealable where the disqualification was predicated upon ethical considerations and "additionally upon significant impingement on a specific legislative policy"); Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp., 496 F.2d 800 (2d Cir. 1974) (en banc) (reviewing the cases); Ceramco, Inc. v. Lee Pharmaceuticals, 510 F.2d 268, 270-71 (2d Cir. 1975) (Citing Silver Chrysler Plymouth, supra ); Kroungold v. Triester, 521 F.2d 763, 765 (3d Cir. 1975); American Roller Co. v. Budinger, 513 F.2d 982, 983 (3d Cir. 1975); Greene v. Singer Co., 509 F.2d 750, 751 (3d Cir. 1971); United States v. Garcia, 517 F.2d 272, 275 (5th Cir. 1975) (criminal trial); Uniweld Prods., Inc. v. Union Carbide Corp., (sic) 385 F.2d 992, 994 (5th Cir. 1967), Cert. denied, 390 U.S. 921, 88 S.Ct. 853, 19 L.Ed.2d 980 (1968); Tomlinson v. Florida Iron & Metal, Inc., 291 F.2d 333, 334 (5th Cir. 1961) (order denying motion for disqualification is final where "harm resulting therefrom is in the nature of the frustration of a public policy which cannot be avoided or mitigated by an appeal taken after the trial"); Fullmer v. Harper, 517 F.2d 20, 21 (10th Cir. 1975). But see Cord v. Smith, 338 F.2d 516, 521 (9th Cir. 1964).
This Court in criminal cases has twice departed from the general prohibition against piecemeal appellate review (citing Abney v. United States, 431 U.S. 651, 97 S.Ct. 2034, 52 L.Ed.2d 651 (1977), and Stack v. Boyle, 342 U.S. 1, 72 S.Ct. 1, 96 L.Ed. 3 (1951)). In each instance, the Court relied on the final judgment rule's "collateral order" exception articulated in Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 545, 547, 69 S.Ct. 1221, 93 S.Ct. 1528 (1949).
The en banc majority did not pass upon the issue of disqualification of Mr. Piliaris, no doubt because it ruled it had no jurisdiction. Any ruling which it would make on the merits of the case would have been Obiter dicta.6
It appears that the appointment of an agency attorney as a Special Attorney to conduct a grand jury investigation in a matter which the agency attorney has instigated, and in which he had been previously involved, is not an isolated incident. In the panel majority opinion we cited the case of United States v. Braniff Airways, Inc., 428 F.Supp. 579 (W.D.Tex.1977), where a similar situation existed with an attorney, formerly employed by the Civil Aeronautics Board, who had been appointed as Special Attorney to conduct a grand jury investigation concerning the very subject upon which he had previously passed while in the employ of the Board. The District Court granted defendant's motion to dismiss the indictment because of this impropriety, holding that the attorney was an unauthorized person to appear before the grand jury.
SEC attorneys were recently rebuffed in their attempt to obtain disclosure of evidence developed in a grand jury investigation in which the SEC was interested. The Court held that these attorneys were not attorneys for the Government as defined in Rule 54(c) Fed.R.Crim.P. In re Grand Jury Investigation, 414 F.Supp. 74, 76 (S.D.N.Y.1976).
A fair and impartial trial is a fundamental aspect of the right of accused persons not to be deprived of liberty without due process of law. (Citing authority).
It is the obligation of the prosecutor, as well as of the court, to respect this mandate. (Citing authority). . . . As such, he is in a peculiar and very definite sense the servant of the law, the twofold aim of which is that guilt shall not escape or innocence suffer. (Citing authority). (137 Cal.Rptr. at 483, 561 P.2d at 1171)
We have so far examined the problem of prosecutorial impartiality largely from the perspective of the accused. Society also has an interest in both the reality and the appearance of impartiality by its prosecuting officials: "It is essential that the public have absolute confidence in the integrity and impartiality of our system of criminal justice. This requires that public officials not only in fact properly discharge their responsibilities but also that such officials avoid, as much as is possible, the appearance of impropriety." (Fn. omitted.) (People v. Rhodes (1974) 12 Cal.3d 180, 185, 115 Cal.Rptr. 235, 239, 524 P.2d 363, 367.) Similar considerations led the American Bar Association to adopt, in its Standards Relating to the Prosecution Function, a provision that "A prosecutor should avoid the appearance or reality of a conflict of interest with respect to his official duties." (Approved Draft 1971, pt. 1, std. 1.2.)
For all the foregoing reasons we conclude that a trial judge may exercise his power to disqualify a district attorney from participating in the prosecution of a criminal charge when the judge determines that the attorney suffers from a conflict of interest which might prejudice him against the accused and thereby affect, or appear to affect, his ability to impartially perform the discretionary functions of his office. (Footnote omitted.) (137 Cal.Rptr. at 485, 561 P.2d at 1173)
Murderers and persons with long criminal records have secured protection of their constitutional rights by the Supreme Court and other federal courts. See, e. g., Lockett v. Ohio, --- U.S. ----, 98 S.Ct. 2954, 57 L.Ed.2d 973 (1978); Bell v. Ohio, --- U.S. ----, 98 S.Ct. 2977, 57 L.Ed.2d 1010 (1978); United States v. Doss, 563 F.2d 265, 282 (6th Cir. 1977) (en banc) (Weick & Engel, JJ., dissenting); Flynt v. Leis, 574 F.2d 874 (6th Cir. 1978), Petition for cert. filed, 47 U.S.L.W. 3027 (U.S. Aug. 8, 1978) (No. 77-1618). (Federal District Court injunction restrained state court criminal trial of obscenity case notwithstanding provisions of 28 U.S.C. § 2283.) Wealthy persons and large corporations with millions of shareholders, such as GM, have constitutional rights which are just as dear to them, and they are equally entitled to protection of those rights from violation.
The dismissal of the interlocutory appeal was error.7
(EXCERPTS FROM AMERICAN BAR ASSOCIATION JOURNAL MARCH, 1978)
Last year the press reported on charges of grand jury abuse and assertions that a grand jury's functions had been distorted to pursue illegitimate ends. Were these accusations voiced by antiwar activists, the Harrisburg Eight, or organized crime? No. They came from General Motors, and G.M. is not alone. Litton Industries, Bethlehem Steel, and the National Council of Churches, among other well-established groups, have joined the call for grand jury reform.
The grand jury needs attention. Grand jury proceedings constitute the one stage of the criminal justice process that has escaped the due process scrutiny to which other aspects of the system have been subjected during the past two decades.
Many attacks have been leveled at the grand jury in recent years. Critics charge that it has departed radically from its proper constitutional function of protecting citizens from unwarranted prosecution and has evolved into a prosecutorial tool devoid of due process. Allegations have been made that the Nixon administration used the grand jury for political, rather than law enforcement, purposes.
The American Bar Association's House of Delegates stepped into this controversy last August by overwhelmingly endorsing a comprehensive set of proposals for grand jury reform. These recommendations could change and give renewed life to the grand jury at both federal and state levels. This action has given impetus to legislation pending in the Congress. It will help to accelerate consideration of similar bills before state legislatures.
Is the grand jury obsolete? Should it be abolished? The Association has rightly opposed efforts to discard it as an anachronism. It should be retained, but with revamping to ensure fairness. The key role grand juries played during the Watergate scandal is testament to their vital part in our criminal justice system. The grand jury can perform an important function in investigating complex crimes, but the missing ingredient of adequate due process must be added.
The measures endorsed by the Association can help to save the grand jury from extinction by restoring fairness while preserving its legitimate functions.
The grand jury is an institution embodied in our common law traditions. It emerged in England in the twelfth century. Scholars dispute whether it was originally a body to further the king's powers or to serve as a protective shield between citizen and crown. Probably it served both functions, protecting citizens who were objects of governmental suspicion and providing an effective investigatory tool to ferret out criminal activity. When the colonists brought the grand jury to this country, however, it was clearly viewed as a citizen's body that could protect them from the whims of the royal governors and English tyranny. The requirement for indictment is embodied in the Constitution, thus mandating use of the grand jury to this day in all federal criminal cases.
But the institution has undergone a continuing evolution since its beginning. England abolished the grand jury in 1933. Many states have revised its functions. While no state has completely eliminated indictment as a means of initiating criminal prosecutions, a majority now allow prosecution by other routes as well. Some rarely use a grand jury, and several Connecticut, Kansas, Michigan, Washington, and Wisconsin have created "one-man" grand juries, granting a judicial officer many powers ordinarily associated with the grand jury.
Detractors of the grand jury and current practices claim it is an unsupervised strong arm of the prosecution. They contend that it is shielded from public scrutiny, unregulated by the courts, virtually unlimited in its subpoena powers, able to question witnesses behind closed doors, and capable of jailing recalcitrant witnesses without trial. They claim the grand jury no longer serves any protective function and that the minuscule percentage of "no bills" reflects reality: that the grand jury is only a rubber stamp for the prosecution.
The grand jury reform package adopted by the House of Delegates contains twenty-five legislative principles. These recommendations, if implemented, can restore fairness to the grand jury system. Counsel would be permitted to accompany a witness inside the grand jury room. A grand jury would not be allowed to name unindicted coconspirators or issue reports denigrating a person's normal fitness to hold office. Judicial review of grand jury reports would be provided prior to publication, with opportunity for persons discussed to seek expungement. Transactional, not the much more limited "use," immunity would be granted. The target of a grand jury investigation would in most instances be given the opportunity to testify. A grand jury subpoena would be returnable only when the grand jury is sitting and would identify the general subject area of the investigation. All grand jury proceedings, except the jurors' deliberations, would be recorded. A prosecutor would not be allowed to use the grand jury to assist in an administrative inquiry or to obtain evidence against an already-indicted person. Witnesses would be protected against harassment, unreasonable delays, and repeated appearances. They would not be required to parade before television cameras and the public to enter the grand jury room to testify.
These reform proposals, drafted by the Section of Criminal Justice's Committee on the Grand Jury, have drawn sharp attack. Opponents argue that they will seriously weaken the grand jury and impede and impair its functions.
The fiercest debate has centered on the principle that would allow counsel into the grand jury room. Federal prosecutors the Department of Justice and United States attorneys around the country have asserted that this would disrupt and delay grand jury investigations.
A more detailed examination of this recommendation, since it is a central thrust of the reform package, will illustrate the need for its implementation and the weakness of arguments in opposition.
It is surprising that this proposal is perceived as so radical that it prompted a personal appearance by Attorney General Griffin B. Bell to oppose it on the floor of the House of Delegates. Eleven states already allow counsel to accompany a witness before the grand jury. One of these, Michigan, is now considering broadening the practice, based on good experience with its present provision, which allows counsel before "one-man" grand juries. Last summer Colorado passed a comprehensive grand jury reform bill with the backing of Denver district attorney Dale Tooley. Massachusetts has just passed legislation allowing counsel inside the grand jury room. New York and California are considering legislation of this nature; in California it has the support of Evelle Younger, the law enforcement minded attorney general.
The American Law Institute has supported counsel for witnesses in its Model Code of Pre-Arraignment Procedure. In the commentary to the code, the A.L.I. pointed out that "complex and important legal issues face a witness before the grand jury. An appearance before that body may subject an individual to the grave danger of self-incrimination or imprisonment for contempt. . . . The witness may also inadvertently lose his right to claim the privilege by operation of the doctrine of waiver. . . . And the inherent pressure and accompanying nervousness of a grand jury appearance upon an individual may make it very difficult for him to remember his attorney's instructions."
Why should a lawyer be allowed to enter the grand jury room with his client? The question would more appropriately be asked in the reverse why not? Almost nowhere else in the criminal justice system is a person who wants a lawyer denied that right. A line of landmark cases from Powell v. Alabama to Miranda, Wade, Gilbert, and Argersinger, relying on requirements of the Sixth and Fourteenth amendments, have guaranteed the presence of counsel at every other critical stage of criminal proceeding.
Not having counsel present leaves a grand jury witness poorly protected. The lay witness is at a considerable disadvantage, having to make judgments even the most seasoned lawyer would find difficult. He is forced to make decisions, even while testifying, that will legally bind him. His testimony can later be used at trial to impeach him. He unwittingly can waive the privilege against self-incrimination. If he refuses to testify after receiving immunity, he subjects himself to imprisonment without trial.
Under present practice, a grand jury witness who needs to consult counsel is put in an awkward position. He must ask permission, get up, go outside the grand jury room, repeat the question to his attorney, and then return. The process is inefficient and ineffective, as well as prejudicial to the witness. It annoys grand jurors and raises speculation in their minds as to the purposes of the consultation.
Charles Ruff, the last Watergate special prosecutor, testified before a congressional committee that "the mere possibility of occasional disruption simply cannot overcome the right of the individual witness to consult his attorney without going through the mildly absurd process of leaving the grand jury room every time. Indeed," he continued, "most prosecutors would admit . . . that they count on the burden of leaving the room to dissuade the witness from asserting his right to counsel."
There is another "catch-22" in the right to counsel. The Court of Appeals for the Seventh Circuit has held that a prosecutor who grants a witness permission to leave the grand jury room to confer with counsel may later raise this fact as relevant to the perjury charges against the defendant. A dissenting judge decried the government's being "permitted to 'sandbag' him (the defendant) by using the fact that he consulted his attorney against him." United States v. Kopel, 552 F.2d 1265 (7th Cir. 1977).
Other courts the Fifth Circuit, for example have said a limit can be placed on how frequently the witness leaves the room to consult counsel. In re Tierney, 465 F.2d 806 (5th Cir. 1972).
Advocates of retaining the present practice assert that allowing a lawyer inside the grand jury room will disrupt its proceedings. They argue that "lawyers will lawyer." Yet, under the Association's proposal, the lawyer's role would be stringently limited. The lawyer could only advise the client, not take part in the proceedings. The lawyer may be present only while the client is testifying. The court could order the removal of a disruptive counsel.
Attorney General Bell has asserted that "minitrials" will result if lawyers sit with their clients in the grand jury. The facts, however, speak otherwise. Practitioners, prosecutors, and judges in the states that already allow this practice report no problems. Lawyers attend many proceedings and quietly sit by and advise their clients without trying to take over the session. Mr. Bell's view reveals little faith in members of the bar. Lawyers are fully capable of restrained, professional conduct in handling these proceedings.
The attorney general also has claimed that this proposal constitutes a "Lawyers' Relief Act." This argument, while good rhetoric, is baffling: whether the lawyer is sitting outside the grand jury room door or inside beside the client, how is the number of lawyers involved changed?
Opponents raise other arguments as well. They claim that a breach in the secrecy rule will result. According to Acting Deputy Attorney General Benjamin Civiletti, letting the attorney into the grand jury room would constitute "an additional source of leaks." This argument sounds good, for who could oppose preservation of grand jury secrecy? But it is poorly based. Rule 6(e) of the Federal Rules of Criminal Procedure specifies that a witness can tell his attorney everything that occurred during his appearance. The lawyer would hear nothing that his client is not already free to tell him.
Critics also maintain that the presence of the witness's lawyer will restrict free testimony in cases involving political corruption, organized crime, and complex economic crime. But the states that already allow counsel into the grand jury chamber in most instances have retained the grand jury as an investigatory body for precisely these kinds of investigations. There are alternate ways of securing a co-operative witness's statement. Evidence can be summarized for the grand jury in the form of hearsay, under Costello v. United States, 350 U.S. 359, 76 S.Ct. 406, 100 L.Ed. 397 (1956). As experienced prosecutors know, very few witnesses decide to co-operate without their lawyer's knowledge. If the witness's testimony is helpful to the government, that fact will quickly become evident to the attorney from the amount of time spent in the grand jury room.
To meet one well-based concern, the Association's recommendations contain a strong statement on multiple representation of witnesses. Recognizing that problems arising from multiple representation could be exacerbated by allowing counsel into the grand jury room, the proposals contain a principle providing that a lawyer should not continue multiple representation in a grand jury proceeding if the exercise of his independent professional judgment on behalf of one of the clients will be or is likely to be adversely affected by his representation of another. If the court determines that this principle is not being followed, it would have the authority to order separate representation.
Back in the twelfth century, perhaps, or in eighteenth century America, when grand jurors were the witness's neighbors, the body traditionally served as the witness's protectors. Law was simple then and in many instances not committed to writing. Most citizens who served on a grand jury lived and died in the same community; they knew their neighbors. But today the modern investigatory grand jury is an arm of the prosecution. Laws are complex, and even the most assertive lay grand juror is to some degree intimidated by the professionalism, Expertise, and authority of the prosecutor. It is naive to assume that grand jurors still fulfill their original role, although this is a convenient argument for defenders of the present system.
The background of the Association's grand jury reform proposals explains their sound basis and practical nature. The Criminal Justice Section's Committee on the Grand Jury, which worked for about three years on the draft, reflected the section's "umbrella" makeup. It included prosecutors, defense counsel, law professors, and judges, most of whom had extensive prosecutorial experience. The committee included Charles Ruff; one of the original Watergate prosecutors, Seymour Glanzer; and the former district attorney of Manhattan, Richard Kuh.
Prospects for congressional action on grand jury legislation appear to be improved. Congress has been looking into charges of grand jury abuse since 1973. Both House and Senate judiciary subcommittees have held extensive hearings. In the House Joshua Eilberg, Democrat of Pennsylvania, and John Conyers, Democrat of Michigan, have sponsored bills, as has James Abourezk, Democrat of South Dakota, in the Senate. The committees have received testimony from a wide spectrum of witnesses, including federal judges and prosecutors, practicing lawyers, legal scholars, and professional groups like the National District Attorneys Association. Organizations that seek broader change, such as the Coalition against Grand Jury Abuse, have also appeared. Many provisions in the pending legislation mirror proposals contained in the Association-approved package.
It is encouraging that many states are now considering changes in their grand jury procedures. The Department of Justice is revising the United States Attorneys Manual to spell out more specifically the proper limits of prosecutorial conduct. This is long overdue. During development of the Criminal Justice Section's recommendations, the Grand Jury Committee met with representatives of the Justice Department and successfully hammered out a number of compromises. At the House of Delegates' session in August, the department supported twenty of the principles as finally drafted.
During this year the Section of Criminal Justice will work closely with the Committee on Association Standards for Criminal Justice to prepare standards and back-up commentary on the grand jury.
Opponents of change fear that massive obstacles will be thrown up in the path of complex criminal investigations, making the job of law enforcement harder. But preservation of the grand jury's efficiency cannot be sufficient justification to allow it continued carte blanche with the rights of witnesses and of those it is investigating. Efficiency has never been the sole guiding procedural rule in our system.
Reform of grand jury procedures will help to retain the grand jury. It will help to restore it to its role as a citizens' body one of the last ways in which laymen actually participate in our criminal justice system. It should serve as an aid to the prosecutor, but not as his lackey.
The grand jury is a long-standing part of our legal tradition written into our Constitution. But it is not sacrosanct. It needs the same attention every other phase of the criminal justice process has received. As a matter of fairness, we need to revamp and rejuvenate the grand jury.
The Honorable John W. Peck heard oral argument and participated in conference consideration of the case, but he became Senior Judge on July 1, 1978, and withdrew from further consideration of the case at that time. See 28 U.S.C. § 46 (1970) and Rule 35, Federal Rules of Appellate Procedure
"The effect of the granting of a hearing En banc shall be to vacate the previous opinion and judgment of this court, to stay the mandate and to restore the case on the docket as a pending appeal." Rule 14(a), Rules of the United States Court of Appeals for the Sixth Circuit
General Motors argues in the alternative that we should assert appellate jurisdiction by treating this appeal as a petition for writ of mandamus under 28 U.S.C. § 1361 or § 1651 (1970). The Court does not reach or decide this question because General Motors has not applied for a writ of mandamus in this proceeding, and the District Judge has not received notice or had an opportunity to be heard and thus has not been made a litigant on this appeal. For discussion of appellate procedure in mandamus actions, see generally Rule 21, Federal Rules of Appellate Procedure; Will v. Calvert Fire Ins. Co., --- U.S. ----, 98 S.Ct. 2552, 57 L.Ed.2d 504 (1978); Schlagenhauf v. Holder, 379 U.S. 104, 85 S.Ct. 234, 13 L.Ed.2d 152 (1964); Note, Supervisory and Advisory Mandamus Under the All Writs Act, 86 Harv.L.Rev. 595 (1973)
See Judge Maris' discussion of the legislative history in Milbert v. Bison Laboratories, 260 F.2d 431, 433 (3rd Cir. 1958) (En banc ). See also Kraus v. Bd. of County Comm'rs, 364 F.2d 919, 922 (6th Cir. 1966) (invoking "exceptional case" standard as criterion to be met under § 1292(b)); Note, Interlocutory Appeals in the Federal Courts Under 28 U.S.C. § 1292(b), 88 Harv.L.Rev. 607, 626-27 (1975). ("(B)ecause the Act is premised on a notion that there should be case-by-case evaluation of efficiency, any universal standard restricting certification seems out of place.")
The majority's mechanical interpretation of the phrase "civil action" goes too far. In another context, the Supreme Court has refused to find a "civil" or "criminal" label dispositive but has instead focused upon underlying policy considerations in deciding the propriety of federal abstention from interference with state court proceedings. Huffman v. Pursue, Ltd., 420 U.S. 592, 95 S.Ct. 1200, 43 L.Ed.2d 482 (1975)
GM had filed with the IRS affidavits detailing abuses and misconduct of IRS agents in visiting various GM plants and insulting its employees. GM alleges that the IRS never investigated these charges, but was using these same agents to testify before the grand jury and presumably they would be examined by the IRS attorney conducting the grand jury investigation
Without oral argument or conference consideration, an administrative panel of said Court consisting of Judges Weick, Edwards and Celebrezze, entered an order on October 3, 1977 dismissing General Motors' § 1291 appeal (No. 77-1508) but granting General Motors Leave to proceed under § 1292(b). (Italics mine).
In other cases the Government was successful in maintaining that a grand jury proceeding is a civil action. See, e. g., United States v. Judson, 322 F.2d 460 (9th Cir. 1963); United States v. Doe (Gravel), 455 F.2d 753 (1st Cir.), Vacated on other grounds, 408 U.S. 606, 92 S.Ct. 2614, 33 L.Ed.2d 583 (1972)
Mr. Ryan's conviction for obstruction of justice was reversed in United States v. Ryan, 455 F.2d 728 (9th Cir. 1971), which case is interesting because it did involve some grand jury abuse and other abuses which are pointed out in the opinion of the Court
It is not believable that the majority intended to overrule Melamed sub silentio
The role of Mr. Piliaris was shown by uncontroverted evidence. The avoidance of harm to a party Pendente lite from a possibly erroneous interlocutory order and the possibility of wasted trial time and large litigation expense both to the party and to the Government surely satisfies all the legal requirements for an interlocutory appeal. Katz v. Carte Blanche Corp., supra; Melamed v. ITT Continental Baking Co., supra
The concurring opinion of our learned colleague Judge Edwards is curious. Although it agrees with Judge Merritt's majority opinion that this Court lacked jurisdiction, Judge Edwards states that the Court did have jurisdiction properly to consider the merits of the case under the All Writs statute, 28 U.S.C. § 1651. The trouble is, Judge Merritt did not exercise that jurisdiction and did not consider the appeal and pass upon the merits. Judge Edwards then undertakes to exercise that jurisdiction and to consider the appeal on its merits, under the All Writs Act, and determined as a matter of law that no conflict of interest was shown by the evidence, and therefore jurisdiction should not be exercised and the appeal therefore should be dismissed